debt
Debt
Vocabulary
| poll | revenue | municipal |
| owe | collapse | elect |
| payout | enable | public-sector |
| haunt | honor (2) | one-by-one |
| capable | paycheck | detrimental |
| bond | vote | municipal bond |
| federal | statewide | legislation |
| handout | deserve | under the table |
| grant | principle | expediency |
| roost | regulation | Founding Fathers |
| insane | curve (2) | constituency |
| scheme | diminish | tipping point |
| ascend | auction | dependency |
| slope | slippery | come to our sense |
| drown | assure | impoverishment |
| one-up | miracle | candidate |
Video
Transcript
In this blog I want to talk about politics and politicians.
Our country, and most of the Western World, is in terrible shape today.
Generations of politicians, especially since World War Two, have made financial promises based on the hope of future revenues that no country, including the US, will ever be capable of keeping.
Now we all know that Greece is bankrupt.
The country owes far more than it can every repay.
For many years, all parties assured the Greek people that they could work five hour days, retire at the age of 50, receive 90% of more of their final paychecks for the rest of their lives, and avoid paying taxes whenever possible.
Year after year, the voters went to the polls and elected the politicians who made the most wonderful promises about how little they would have to work and how much money they were going to receive.
Today the country of Greece is bankrupt and will probably collapse — whether or not it takes the euro with it.
Now here in America, we owe far more money than does Greece. Our various governments (city, state and national) have promised government workers alone
wonderful pensions, enabling them to retire in their fifties, and live comfortably with unlimited cost of living increases, plus full medical benefits for the rest of their lives.
Today we are more than $3 trillion in debt, at a city, state and national level — just for public-sector employees pensions.
There’s NO WAY this amount of money can ever be paid back.
There’s no level of taxation that can pay so much money. There’s no way these pensions can ever be honored.
And one-by-one, cities across America are going bankrupt with the cost of their public-sector union payouts and pensions.
Now how did this happen?
Well it’s simple.
The politicians ran for office promising benefits and favors to government workers that they had no idea would ever have to be paid.
When they got into office, they found that there was not enough money to fill the promises that had been made, so they began to borrow money in every way possible.
And now, those millions and hundreds of millions and even trillions of dollars of government debt are coming back to haunt them.
The people who bought their municipal bonds and debts and now requesting that they be repaid — as promised.
But there’s no money to repay them.
For example, the state of California, where I live, is bankrupt.
It’s essentially owned by the public-sector unions, who have been given increasingly generous wages, income, benefits and retirement packages year-after-year-after year . . . and decade-after-decade in exchange for voting as a block for politicians promising to give them these benefits — and even more.
And the politicians, both nationally and statewide, true to their word, marched into the state house and passed the legislation, enabling public sector employees to live on incomes almost 50% higher than the average taxpayer, who has to pay for the generous pensions by taking the money out of his pocket, and off his kitchen table, out of the mouths of his children.
At the federal level, the situation is even worse, generation after generation of politicians run for office on the basis of promises to handout FREE money.
This “free money” is money that people have not earn — and which they do not deserve.
The politicians have promised — under the table — to reward major contributors with special legislation and government grants that come right out of the pockets of working people and right off the family tables of those who go to work each day.
What has been at work here is what I call the “e-factor”, the expediency principle.
This principle says that human nature being what it is, people try to get the very most for the very least in the shortest period of time with little or no concern for the consequences of their actions.
What this means is that many people are weak.
Now the Founding Fathers recognized this when they set up a government of checks and balances, so that there would be some curve or limit on the behaviors of politicians especially those behaviors in the form of taxes, regulations and spending that would ultimately be detrimental, if not destructive, to the country as a whole.
Now, the chickens are all coming home to roost.
Like drug addicts, the politicians cannot get their habits under control.
They can’t seem to stop spending.
If they even suggest slowing down the rate of handing out free money to favored constituencies, there are riots in the streets.
In my book, Something for Nothing, I point out that the thought of free money makes people crazy. But the threat of taking it away, actually makes them insane.
Now this concept neatly summarizes then entire situation that we have politically and economically in America today.
The politicians have gotten elected by promising free money since there are always enough people who are too weak to resist the blandishments of free money, even though they know that getting free money over the long term is not possible, these people vote for the politicians who come up a wonderful scheme or idea, such as “tax the rich” to get them free money; money which they have not earn and which they do not deserve.
Politics then becomes like a busy auction: each politician runs for office, trying to one-up or beat the other politicians.
Soon because the great majority of Americans are honest, and honest people realize that you cannot get something for nothing, there forms two political constituencies, two groups or interest groups.
One representing the makers, the people who produce wealth; the other representing the takers, the people who consume wealth without producing or without producing as much of it as they consume.
In America today, almost half the population — 47% in the last, famous statistic — pay no federal income taxes.
As a result, they are fully in favor of raising taxes on the diminishing number of people who still pay those taxes.
They are in favor of getting free money: something for nothing, which they have not earned and do not deserve.
On the other side are those people who are working hard, building and operating small and medium-sized businesses, and even large businesses who are producing value, producing goods and services that people want and need and willing to pay for.
These people see the growth of government regulations and taxation as essentially strangling their ability to operate, their ability to invest, and create wealth and hire new people.
So we’ve reached a tipping point in our society: we can continue down the slippery slope of national bankruptcy and impoverishment . . .
Or we are going to come to our senses, turn around and begin to do everything to make America the entrepreneurial, wealth-creating society, full of opportunity for the coming generations.
Now the majority of Americans today believe that America is on the wrong path.
And they’re right.
They believe that their children will have a lower standard of living than they do.
The majority believe that America has past it’s time sunshine — and is moving towards the sunset, while other nations, especially in Asia, are on the ascendency.
All around the world, the more dynamic countries of Asia are convinced that Americans are growing soft and lazy.
When they look at how our government hand out uncounted BILLIONS of dollars of free goodies to people who do not work, and punishing the wealth creators by drowning them in regulations and taxes, they conclude that America is on its last leg.
The fact is you cannot spend what you do not have. You cannot consume what you do not produce. You cannot enjoy wealth that does not exist.
You cannot pay people not to work, and expect them to take jobs and continually upgrade their skills for those jobs.
We cannot live in a fantasy land and hope that somehow a miracle will occur to allow our multi-trillion dollar dept to go down and our national wealth to go up.
This is simply NOT possible.
And time is running out.
In this coming election, you have two choices: you can vote for the party of increasing government dependency — and ultimate national impoverishment . . . or you can vote for the candidate and the party of hope and opportunity.
A belief in the entrepreneurial spirit and ability of Americans to create wealth and grow out of our financial problems of today.
It’s up to you to make the right choice.
Questions
1. According to the speaker, the Western World is having problems due to politicians and politics. Is this correct or wrong?
2. Today, Greece is bankrupt. Why is Greece bankrupt? Are the people responsible for the crisis?
3. Is only Greece having problems? Why is California in debt?
4. Who earns more money, the average public-sector (government) worker or the average private-sector worker?
5. What is the e-factor or expediency factor?
6. People can become addicted to “free money”. Yes or no?
7. What is the main rallying cry, theme, scheme or idea of many politicians?
8. Are most Americans optimistic or pessimistic about their children’s future and the future of the US?
9. What is good and what is bad for business and the economy?
10. Does the speaker make a political endorsement at the end?
A. Do you agree with the speaker?
B. Are there problems with the government? What is the solution?
C. Are there problems with individual citizens? What should they do?
