I remember sitting in the lobby of my college dormitory stupefied, watching the World Trade Organization riots tearing apart downtown Seattle in 1999. Twenty-five hundred miles away, the view was surreal. My hometown had become a war zone. Familiar streets and shops, normally bustling with lively but peaceful activity, formed the backdrop for chanting crowds, tear gas, vandalism, and sheer chaos.
One scene in particular stuck with me: beleaguered law enforcement officers in riot gear atop a police vehicle, outnumbered and surrounded by screaming hooligans. Firing rubber bullets, with their backs pointed inward the police formed a circle that shrank as the mob descended upon them. It looked like a desperate last stand.
During the five days of rioting, news clips played the same scenes in an endless loop. One favorite was of trenchcoated teens smashing the windows of a downtown Starbucks, decrying globalization while wearing Israeli Army surplus gas masks and Chinese-made bandanas. I admit I’m inclined to smash Starbucks’ windows at times as well, though more out of frustration over bitter coffee than globalization.
Ultimately, Seattle’s police chief lost his job because some thought his reaction to the riots too severe. I thought it not severe enough. But Seattle is, after all, a city whose leaders refused to salt the roads during a 2008 snow storm that left the region paralyzed for two weeks. Why? Environmentalists were concerned about the salt runoff into the adjacent bay, which happens to be a saltwater body connected to the Pacific Ocean. The culture defies logic.
I mention the Seattle experience because that’s the only personal frame of reference I have for what violent social unrest can do to one’s home. I didn’t grow up in the 1960s or 70s (Deo gratias), so I missed out on the throngs of college students marching in protest because their professors insisted they actually learn and be held accountable for that learning. This is not to trivialize all of the era’s demonstrations, but let’s be honest: much of it was just plain silly.
So it goes. In the U.S., professional protesters, self-styled anarchists, and pampered college students who spend too much time reading Foucault and Derrida run wild through the streets, vandalize private property, and set dumpsters on fire. Across the Atlantic, the shiftless riot for other reasons.
“Better to die from a bullet than working” was one slogan from the anarchist protesters who brought Greece to a standstill earlier this year when massive debt forced the government to cut spending by $40 billion. The ultimate goal was to cut the government’s budget deficit from 13.6% of GDP to less than 3% by 2014. One Greek official estimated that as a result of the cuts, 20% of the government workforce would be eliminated and citizen pensions would be cut by 10%. In response, rioters attacked banks, stores, set fires, and even killed people.
France and Britain smelled the Greece fire and began taking measures to prevent its spread. The French government proposed the modest step of raising the retirement age from 60 to 62 (queue horror and shock). Labor called a general strike and the country ground to a standstill.
UK Prime Minister David Cameron wants across-the-board budget cuts of 25% (excepting health care and foreign aid), in the hopes of eliminating Britain’s deficit by 2015. In the wake of plans to allow universities to increase tuition, Britain’s National Union of Students (the fact that such a group exists tells you there’s a problem) went berserk. 40,000 people marched, some even vandalizing the headquarters of Britain’s Conservative Party.
“Students and university staff are protesting against government plans to allow universities to charge up to 9,000 pounds (about $14,500) per year in tuition fees—a substantial rise from the current cap of 3,000 pounds (about $4,800).
‘We are taking to the streets in unprecedented numbers to tell politicians that enough is enough,’ National Union of Students President Aaron Porter said in a statement before the demonstration.
‘We will not tolerate the previous generation passing on its debts to the next, nor will we pick up the bill to access a college and university education that was funded for them,’ he said.”
That last bit is telling. Translation: “The other guys got it, so we should too.”
Watching Grecian society buckle under its mountain of government debt, watching France come to a virtual halt when the government attempts modest steps at preventing it from becoming the next Greece, and watching British students throw a temper tantrum when asked to shoulder more of the cost of their education, I wonder: are we ready for economic reality to kick in here?
This fundamental question is this: is it in the best interests of a nation to have large swaths of its population addicted to subsidies of one sort or another? William D. Gairdner observed that Western democracies are:
“becoming tripartite states in which one-third of all taxpayers are employed by government at some level, one-third of the people are crucially dependent in some way on government support (welfare, Medicare, Medicaid, farm subsidies, and a gazillion other untrackable support programs), and one-third produces the income (the tax base) paid out in supports for the first two-thirds.”
I wrote earlier about our own massive government debt and that a day of reckoning will come. It’s only a matter of time. Some misguided souls believe we can simply tax our way out of the problem. Our anointed leaders and their expert central planners are dabbling in inflating our way to prosperity. The more deluded among us believe we can borrow indefinitely.
The political reality is such that steps, if any, our government takes to address deficits and the debt will be a combination of spending cuts and tax increases. I’m of the mind that the more money government has, the more it will spend (that’s what I get for studying history), so I prefer the former over the latter. But how would Americans react to the spending cuts that will be necessary to bring us back to solvency?
The health care reform debate gave us a glimpse when many elderly lambasted subsidies for the poor as “socialism” while fighting like mad to prevent Medicare cuts. The dole is like appropriation earmarks: take away the other guy’s, not mine.
The President’s debt reduction commission (queue laughter) recently made recommendations sure to raise hackles with all sorts of folks. Among them:
- Increase the Social Security retirement age by one month every two years after it reaches 67 under current law. It would reach 68 around 2050 and 69 around 2075.
- Gradually raise the threshold on the amount of income subject to the Social Security payroll tax.
- Give retirees the choice of collecting half their benefits early and the other half at a later age.
- Overhaul individual income taxes and corporate taxes. For individuals and families, eliminate a host of popular tax credits and deductions, including the child tax credit and the mortgage interest deduction. Significantly reduce income tax rates, with the top rate dropping to 23% from 35%.
- Reduce the corporate income tax rate to 26% from 35%, and stop taxing the overseas profits of U.S.-based multinational corporations.
- Increase the gas tax by 15 cents a gallon to fund transportation programs.
- Freeze Defense Department salaries and bonuses for three years, and noncombat military pay at 2011 levels for three years. Double Defense Secretary Robert Gates’ proposed cuts in defense contracting. Reduce overseas bases by one-third, cut spending for base support and integrate children in military families into local schools.
- Reduce congressional and White House budgets by 15%, freeze federal compensation at non-defense agencies for three years, cut the federal work force by 10%, eliminate 250,000 non-defense contractors and end money for commercial space flight.
- Eliminate noncompetitive spending bills known as “earmarks.”
- End grants to large and medium-sized hub airports; require airports to fund a larger portion of the cost of aviation security.
- Cut funding for the public broadcasting.
- Limit or eliminate altogether the tax-free status of employer-provided health benefits, providing incentives for people to enroll into cost-conscious insurance plans.
Limit annual cost increases for Medicare and Medicaid, the giant health federal care programs, to no more than 1% above the growth rate of the economy. This would be accomplished by rewarding quality instead of sheer volume, demanding rebates from drug companies that want to participate in Medicare and raising cost-sharing for Medicare recipients while limiting their out-of-pocket costs.
I doubt news of these recommendations will result in rioting and chaos in the streets, though I admit I’d pay good money to watch NPR and PBS employees go bonkers and tear up a city (Detroit perhaps?).
Clueless American college students travel the country rioting over issues such as free trade, globalization, and the decimation of the Burmese ground squirrel habitat. Will they take to the streets in protest when tuition increases and financial aid reductions threaten to crowd out their recreational substance budgets or draw down their trust funds?
Will public sector workers try to shut down society when their unions are no longer able to protect their generous pay scales and benefits from the somber economic realities already swamping taxpayers?
It remains to be seen.
We’re living on borrowed prosperity. Somewhere it entered the mind of man that others owe him a living regardless of his ability to work. When did this happen? I’ll leave that to the sociologists. St. Paul noticed it, if that’s any indication.
A reset looms. Right now the status quo prevails: Interest groups and their hordes of lobbyists will ensure most of the aforementioned debt reduction recommendations never even become ink on a bill. When pressed, Democrats and Republicans alike will close ranks around their constituents’ sacred troughs. But at some point, our venerated statesmen will have to choose between paring back leviathan or allowing social and economic collapse.
For now, our Chinese and Arab creditors are still willing to fund our profligacy. Riots and unrest are distant, on another continent—closer than ever before thanks to technology, but farther than ever from our illusions of security. Unless the virtuous rise up to defend what’s left of our Republic, we’ll be next.
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