The Government vs. the American Character

609.3K Views
Apr 21, 2014

Over the past 50 years, the purpose of the American government has radically transformed. Whereas its main goal in domestic matters used to be to protect liberty, it is now an entitlements machine, transferring over $2 trillion per year from some people's pockets to others. Nicholas Eberstadt of the American Enterprise Institute explains how the explosions in social security, medicare, medicaid, and other welfare programs are changing the American character for the worse--from one that is focused on individual responsibility and giving, to one that is focused on grabbing as much of the pie as possible.

Entitlement programs now account for over two-thirds of all federal spending. Fifty years ago, they were less than a third. 

  • According the Office of Management and Budget, in 1965 federal entitlement programs accounted for 28% of all federal budget outlays. By 1975, they accounted for 48%. By 2015, federal entitlement programs had grown to represent a full 72% of the total federal expenditures.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “A Nation of Takers: America's Entitlement Epidemic” – Nicholas EberstadtView Source

The federal government now spends over $2 trillion a year on entitlements—100 times more than it did in 1960. 

  • The federal government now spends 100 times more on entitlement programs—Medicaid, Medicare, Social Security and the various welfare programs—than it did fifty years ago. In 1960, the government transferred $24 billion (in 2012 dollars) to individuals for entitlements. By 2010, it transferred $2.2 trillion. After adjusting for inflation and population growth, that’s an increase of 727%.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “The Great Society at Fifty: The Triumph and the Tragedy” – Nicholas EberstadtView Source

Since the entitlement state began in 1960, men have increasingly dropped out of the workforce.

  • Since the entitlement state began in 1960, men have increasingly dropped out of the workforce.View Source
  • This trend suggests the American ethos of self-reliance and independence has shifted among an increasing number of Americans toward dependence on the government.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “Men Without Work: America's Invisible Crisis” – Nicholas EberstadtView Source

Entitlement spending is projected to consume all tax revenue by 2045.

  • If nothing changes the current trajectory, healthcare spending and Social Security transfer payments will grow to consume all federal tax revenue by the year 2045.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “A Nation of Takers: America's Entitlement Epidemic” – Nicholas EberstadtView Source

Entitlement spending growth is not a party-specific problem—both parties are guilty of allowing it to increasingly consume the budget.

  • Even though Democrats are often considered the party of entitlement spending, between 1960 and 2010, entitlement spending growth was approximately 8% higher in years during which Republicans held the presidential office.View Source
  • If nothing changes the current trajectory, healthcare spending and Social Security transfer payments will grow to consume all federal tax revenue by the year 2045.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “The Great Society at Fifty: The Triumph and the Tragedy” – Nicholas EberstadtView Source

The early American ethos that championed self-reliance and independence is rapidly shifting more toward dependence on government.

  • Early on, Americans were known for their self-reliance and independence, most notably observed by Alexis de Tocqueville in the 1830s. Americans did not view poverty as a permanent state but rather as a temporary challenge that could be overcome by hard work.View Source
  • Since the entitlement state began in 1960, men have increasingly dropped out of the workforce, a sign that suggests the American ethos has dramatically changed.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “Men Without Work: America's Invisible Crisis” – Nicholas EberstadtView Source

Just how out of control is entitlement spending? Since 1960, it has exploded by over 700 percent.

  • In 1960, the government transferred $24 billion (in 2012 dollars) to individuals for entitlements. By 2010, it transferred $2.2 trillion. After adjusting for inflation and population growth, that’s an increase of 727%.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “A Nation of Takers: America's Entitlement Epidemic” – Nicholas EberstadtView Source

Over the past 50 years, the purpose of the American government has undergone a radical transformation into a vast entitlements machine.

  • According the Office of Management and Budget, in 1965 federal entitlement programs accounted for 28% of all federal budget outlays. By 1975, they accounted for 48%. By 2015, federal entitlement programs had grown to represent a full 72% of the total federal expenditures.View Source
  • WATCH: American Enterprise Institute’s Nicholas Eberstadt on the impact of entitlements on America.View Source
  • Related reading: “The Great Society at Fifty: The Triumph and the Tragedy” – Nicholas EberstadtView Source

Over the past 50 years, the purpose of the American government has undergone a radical transformation. So much so, that even Franklin Roosevelt wouldn’t recognize it, let alone Abraham Lincoln or Thomas Jefferson.

Once admired for the minor role it played in citizens’ lives, the American government, both federal and state, has become, within living memory, a vast entitlements machine whose primary function is to dispense benefits.

Indeed, federal and state governments now devote more attention and resources to the public transfer of money, goods and services to individual citizens than to anything else.

By 2010 entitlement payments accounted for about two-thirds of all federal spending, with all other responsibilities of the federal government -- in other words, all the things government should do -- making up barely one-third.

According to the Bureau of Economic Analysis, in 1960 U.S. government transfers to individuals totaled about 24 billion in current dollars. By 2010 that total was almost 100 times larger or $2.2 trillion. After adjusting for inflation and population growth, that was still an increase of 727%.

What does this all this mean? And what is the consequence?

From the founding of our nation until quite recently, Americans were regarded, both at home and abroad, as exceptional in a number of ways. One of these was their fierce independence, which informed not only the design of the political experiment that is the U.S. Constitution, but also Americans’ approach to everyday affairs. Specifically, this meant an affinity for personal enterprise, a horror of dependency and a disdain for anything that smacked of a hand out.

Overcoming this historic cultural resistance to accepting government aid has not been easy. But it has been achieved. Far from being a source of shame, accepting government aid is now considered normal, even desirable.

From cradle to grave, a treasure chest of government-supplied benefits is there for the taking for every American citizen -- and exercising one’s legal rights to these many gifts is now part of the American way of life.

In addition to this transformation of fundamental American values, as citizens vote to reward themselves ever more lavishly from government coffers, the obvious question arises: who’s going to pay for it?

That’s a question politicians always seem to prefer to put off til next year.

Most probably, the burden will fall on the young. They have decades of tax paying ahead of them. But having been raised increasingly on the taker mentality and accustomed to accepting government benefits, it’s not clear that the young understand the future they face as the cost of these promises far exceed the nation’s provision to pay for them.

Then again, perhaps they will demand reform, and bring us back to an America more committed to personal responsibility and less dependent on government generosity.

The U.S. is a very wealthy society. If it so chooses, it has vast resources to squander. And internationally, the dollar remains the world’s most trusted currency.

Such advantages might postpone the day of economic judgment. But it will not postpone the day of reckoning for the American character.

That, unless we decide otherwise, may be sacrificed long before the credibility of the American economy.

I’m Nicholas Eberstadt of the American Enterprise Institute for Prager University.

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