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  • America Treading Down Road to Serfdom with Big Spending

    “The late great Austrian economist F.A. Hayek would have seen the Arab Spring for the economic revolt it was right from the start,” writes Hoover Institution scholar Fouad Ajami in The Wall Street Journal.

    In his iconic Road to Serfdom, Hayek laid out the stepping stones that lead societies to abandon individual freedom and replace it with central planning and socialism. Ajami explains how the Arab world went down its road to serfdom during the 1950s and ’60s. America faces a similar risk today. Ajami writes:

    “What Hayek would call the Arab world’s “road to serfdom” began when the old order of merchants and landholders was upended in the 1950s and ’60s by a political and military class that assumed supreme power. The officers and ideologues who came to rule Egypt, Syria, Iraq, Libya, Algeria and Yemen were men contemptuous of the marketplace and of economic freedom.”

    As these countries neglected property rights and instituted bloated bureaucracies characterized by rampant corruption, their economies headed downward. Decades later, these policies have resulted in stricken economies with populations who are unable to provide for themselves and have now come to recognize that lack of liberty is the root cause of their demise.

    No country is immune to the dangers lurking from expanding government. Speaking at The Heritage Foundation about his latest book, The New Road to Serfdom: A Letter of Warning to America, conservative British politician Daniel Hannan warned the United States not to follow the model of big government and regulation that has left Europe with unsustainable budgets and populations dependent on the public sector. As measured by Heritage’s Index of Economic Freedom, big-government policies result in economies that are unfree, saddled with large debts, and unable to flourish—in Europe, the Arab world, or in America.

    America’s current battle to rein in the growth of entitlement programs and control spending is indicative of the country’s dangerous road to serfdom. Faced with unsustainable levels of government spending and trillions of dollars in unfunded liabilities, some Members of Congress such as Paul Ryan (R–WI) have wisely proposed Medicare reform and stopping the expansion of the federal government under Obamacare. Without these reforms, the cost of these entitlements will continue to grow, forcing the government to increase taxes substantially or ration care.

    President Obama and others have attacked the Ryan reforms and instead are pursuing a path of rationing care from the top down by handing control over seniors’ health care to an unelected board of bureaucrats. At the same time, America’s unfunded entitlement liabilities threaten to doom future generations of Americans to massive tax increases, as this Heritage chart shows.

    To prevent the U.S. from following Europe down the road to serfdom, the growth of government must be reversed. Entitlements must be reformed, and excessive spending must be controlled. Members of Congress serious about reversing this trend should mine the Heritage Saving the American Dream plan for ideas to fix the debt, cut spending, and above all, restore American prosperity.

    Derek Bekebrede is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Economics [slideshow_deploy]

    9 Responses to America Treading Down Road to Serfdom with Big Spending

    1. Jeff, Illinois says:

      If the Ryan plan is so great . . why did so few americans when polled dismiss it? If the Ryan plan is so great why did Ryan himself emphasize the point that it won't affect seniors until several years out. The Ryan plan is a voucher plan with reducing benefit over the long haul. Insurance companies are not looking to insure aging seniors, unless they have a boat load of money, not a voucher trifle.

    2. Peter Stroempl says:

      I view with interest how Mr. Obama has responded to the opposition's position. He threatens to stop or delay payments to the elderly, the military and others.. with the expectation that these threatened folks will howl. In effect.. Mr. Obama is telling the elderly, the military and the others.. that government bureaucrats are much more important. He is a demagogue..

      • Paul says:

        If the debt ceiling is not increased, the Feds still have the income to pay interest on the debt, pay the military, and pay social security. I assume those three things will be paid, but it's up to Obama.

    3. used to be a liberal says:

      "We won't be fooled again" Obama says the sky is falling, the U S will fail on it's debt, certain programs won't get paid, yet others will such as acorn, yes they are still getting money. B S Obama!! 4 trillion gone missing on your last fiasco. I M F says global catastrophe if Obama doesn't get what he wants, that is more B S.

      The last 4 trillion, the 4 trillion that went missing went to feed the "New World Order" it went to boost European socialism, as it only works with other people's money. They need this money or socialism collapse, and that is the bottom line folks. The "New World Order" fails, The risk of exposure of Obama's planned demise Of the U S may very well come to light, George Soros exposed, and the plan fails.

      This plan has been active since Bush 1 then Clinton, then Bush 2, and now Obama. All in the name of the "New World Order" All the the other stuff is just smoke and mirrors.

    4. steve h says:

      Peter – that is because that is what would happen if we don't raise the debt limit. Payments will be delayed or stop.

      Seems to me conservatives want to go back to ways of old England monarchies, the way they push for no estate tax so kings can pass on their huge estates (most of whcih was never taxed) to their princesses like paris hilton.

      • Tony G says:

        Steve– Exactly how many times should the same original income stream be taxed? The money that was used to buy an estate or family farm was taxed as income. Then any income that farm generates is taxed again as income. You seem to have forgotten whose money it is…the individual who took the risk and performed the hard work needed to earn it, or is it Washington's right to confiscate a large porition of it? Our country is built on the individual's right to choose, the free market gives us the incentive to create and be rewarded for our efforts. Confiscating an individual's assets so they can be redistributed to those who take no risk removes the incentive to create & produce. remove those elements from the equation and you will stiflle creativity, productivity and therefore the quality of life for all members of society, not just the wealthy.

    5. Tony G says:

      I voucher system for Seniors to purchase Medicare is a terrible idea and a non-starter which will never take hold even with the conservative segment of seniors. Many Medicare receipents are extremely low income, therefore cannot be, or should be subject to the whims of the for- profit health care system. This removes any element of financial & emotional "security" that seniors deserve and that the original system was designed to provide. The only way this type of program work be practical would allow for a 30 year phase in so young adults (of all educational backgrounds) can plan their futures and be responsible for the consequences of harmful abuses like smoking and excessive substance abuses. The Ryan Plan falls short because it forces people in their early 50's to implement changes with very limited amount of time. Let's not forget, many of our citizens are not adequately versed or educated to be able to adapt to swift changes like this. Seniors & the Handicap deserve the sense of security that they were promised.

    6. Bobbie says:

      Getting rid of the fraud and replacing social workers with people who are dignified and honest and have self respect to hold accountabilities, sure would clean up alot of what isn't in our control.

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