Who won the Cold War? That’s a no-brainer. The United States prevailed while the Soviet Union collapsed, and the People’s Republic of China dumped Marxism; capitalism (free markets and private property) triumphed over socialism (centrally planned markets and state-owned property); an ethos of individual rights proved to be more resilient and healthy than collectivist ideology; relatively small, democratic government clearly was demonstrated to help a society prosper far more effectively than elitist Big Government.
How ironic, then, that voices in Russia and China are mocking our current Big Government policies. Those whose countries took the tragic, impoverishing detour through Big Government hell now react with scorn and derision as we Americans charge headlong down that same path. What an amazing spectacle it must be for them to see the victor of the Cold War borrow many pages from the losers’ playbook.
To read a startling indictment of the American predicament, Google the words “American capitalism gone with a whimper,” the title of an article by Stanislav Mishin. The author writes, “the American descent into Marxism is happening with breath-taking speed.”
This decline has happened because, according to Mishin, “the population was dumbed down through a politicized and substandard education” that produced millions of Americans who “know more about their favorite TV dramas than the drama in D.C. that directly affects their lives.” Mishin also faults the widespread abandonment of Christ’s religion in America, our loss of faith. This is the cultural backdrop for a political system that has culminated in Barack Obama’s unprecedented “spending and money printing.” Mishin believes that, under Obamanomics, “America at best will resemble the Weimar Republic and at worst Zimbabwe.”
Earlier this year, reports Mishin, “Prime Minister Putin … warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster.” Mishin has concluded that we are ignoring Putin’s warning—based on 70 years of suffering during the nightmarish Soviet experiment in central planning—and he concludes, “The proud American will go down into his slavery without a fight, beating his chest and proclaiming to the world how free he really is. The world will only snicker.”
When I first read this astounding diatribe, I thought perhaps it had been written as a satire, almost as a spoof of what some libertarian writers in the United States have written. After consulting with a Russian friend, I have concluded that Mishin wrote in complete earnestness. Either way—satire or grim analysis—what Mishin wrote is no laughing matter. Mishin’s is one of many voices, foreign and domestic, warning us of the dangers of faith that government can be omnicompetent and can meet all our economic needs.
Adding to the irony of a Russian warning the United States about the dangers of Marxism is the fact that this article appeared in the online publication Pravda.ru—the contemporary version of the Soviet-era newspaper Pravda that served as the official Communist Party channel for pro-communist, anti-American propaganda.
Another harsh indictment of our ill-advised embrace of Big Government occurred on June 1, during Treasury Secretary Tim Geithner’s official visit to China. Speaking at the University of Beijing, Geithner assured a large audience of students that China’s large holdings of U.S. Treasury securities were “very safe.” The students laughed out loud. This reaction might have been unusually rude, but it was brutally honest. They didn’t believe Geithner for one second.
When the ability of the United States government to repay its debts (or at least, without doing so in significantly depreciated dollars) is perceived as a joke, it is anything but a laughing matter for our country. The Chinese gave us a wakeup call, although we appear not to have heeded it.
The Chinese students see what is plain for anyone with eyes to see. For years, fiscal discipline has been eroding in Washington, but President Obama has increased government spending with reckless abandon as the leviathan government absorbs more and more of the private sector. As I wrote in “Into the Fiscal Abyss,” with Uncle Sam’s total financial obligations totaling approximately five times our GDP, there is no way those debts and promises can be honored. The most likely outcome will be Uncle Sam—the largest debtor in human history—paying off those debts in greatly depreciated dollars. Indeed, our one-trick Federal Reserve (Motto: When there’s a bump in the economic road, inflate) already has begun to create vast sums of new dollars through the mechanism of “quantitative easing”—the direct purchase of the bonds that the government issues to finance its massive spending agenda.
The Chinese students laughing at Geithner told us implicitly what Stanislav Mishin told us explicitly: It is runaway government spending, stemming from the socialistic error that the government can be all things to all people, which threatens us all with financial cataclysm, national bankruptcy, and the loss of our prosperity and our freedoms. From the perspective of the Russians and the Chinese, the joke is on us. But for all of us, America’s plunge into the Big Government trap is no laughing matter.
- Biden Resumes Obama’s Efforts Against Domestic Oil Production - July 13, 2021
- Biden economic team predicts long-term slow growth - June 30, 2021
- The Worst-Kept Economic Secret in America: High Inflation Is Back - May 19, 2021
- Raise the Corporate Tax Rate? Economic Obtuseness in High Places - May 12, 2021
- Washington’s Bi-Partisan Fiscal Folly - May 6, 2021
- The Problem with Hedge Funds - April 13, 2021
- Wall Street Outsiders Versus Hedge Funds - February 1, 2021
- The Problematical COVID-19 Relief Legislation - January 14, 2021
- Giving Thanks to Society’s Economic Benefactors - November 19, 2020
- Why Fracking is a Big Issue - October 30, 2020