“In questions of power … let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution,” wrote Jefferson.73 A century ago, we forgot Jefferson’s warning when Congress and Wilson ceded to a Federal Reserve of anointed bankers the power to control the supply of America’s money. That year, 1913, a twenty-dollar bill had the same value and purchasing power as a twenty-dollar gold piece. The twenty-dollar gold piece is today worth 75 twenty-dollar bills. The dollar has lost 98 to 99 percent of its purchasing power while in the custody of a Federal Reserve whose sworn duty it is to protect the purchasing power of the dollar.
For four generations, Americans have been subtly and systematically robbed of their savings by a Federal Reserve that has steadily inflated the money supply to accommodate politicians who wished to wage wars and win applause by an endless expansion of government that now consumes a fourth of the economy and taxes and regulates people in ways George III never dreamed of. “The first panacea for a mismanaged nation is inflation of the currency; the second is war,” said Ernest Hemingway. “Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”74
In late 2009, Bernanke, frustrated by fourteen months of unemployment above 9.5 percent, terrified of deflation, even though gold and commodity prices were hitting record highs, signaled that the Fed would start printing money, because inflation was “too low.”75
A DEADLOCK OF DEMOCRACY
We were blindsided. We never saw it coming.
So said Goldman Sachs’s Lloyd Blankfein of the financial crisis of 2008, likening the probability of such a collapse to the probability of four hurricanes hitting the East Coast in a single season. Blankfein was reminded by the chairman of the Financial Crisis Inquiry Committee that hurricanes are “acts of God.” But Blankfein was supported by Jamie Dimon, of JPMorgan Chase: “Somehow, we just missed … that home prices don’t go up forever.”76
The Wall Street titans conceded they did not foresee that the housing bubble might burst and that they never factored in the possibility of a collapse in value of the subprime mortgage securities they had piled up on their books. Backing Blankfein’s plea of ignorance is this undeniable truth: the crisis that killed Lehman Brothers would have killed them all, had not the Treasury and Federal Reserve given America’s “too big to fail” financial institutions cash transfusions of hundreds of billions in bailout money.
Yet, before the crisis, there were Americans who warned that a housing bubble was being created. Some predicted that what William Bonner called the Empire of Debt was coming down. Today we are hearing new warnings—that the United States, with deficits running at 10 percent of GDP, is risking a run on the dollar or default on the national debt. Among those cautioning us to beware the consequences of huge deficits are Rudolph Penner, former head of the Congressional Budget Office, and David Walker, former comptroller general.
With the public debt—that share of the national debt held by citizens, corporations, pension funds, sovereign wealth funds, and governments—having risen by 2009 from 41 to 53 percent of GDP, Penner and Walker believe that it is imperative that we get the deficit under control. And to convince the world America is not Greece writ large, America must soon produce a credible plan for closing that deficit. There are three ways to do it. The first is through rapid economic growth that increases tax revenue and reduces outlays for safety-net programs such as unemployment insurance. But growth comes slowly and can take us only so far. To close a deficit of 10 percent of GDP, major cuts in federal spending and tax hikes seem unavoidable.
Now, consider the politics. The five largest items in the federal budget are Social Security, Medicare, Medicaid, defense spending, and interest on the debt. But with trillion-dollar deficits projected through the Obama years, even if he serves two terms, interest on the debt, which must be paid, must go up.
And with seniors angry over Medicare cuts to finance health coverage for the uninsured, it would seem suicidal for the Democrats to cut Medicare again. The same holds for Medicaid. Are Democrats, defeated in the congressional election of 2010, going to cut health benefits for the people who stood loyally by their party in defeat? Are Democrats going to grab the third rail of American politics and cut Social Security?
Any significant cuts in major entitlement programs by House Republicans would require the acquiescence of Harry Reid’s Democrat-controlled Senate and Barack Obama’s White House. And how likely is that?
As for defense, Obama has himself deepened America’s involvement in Afghanistan, doubling troop presence to 100,000. The Pentagon has to replace weaponry and machines destroyed or depreciated in a decade of war. And any major defense cuts would meet with ferocious Republican resistance.
Where, then, are the big budget cuts to come from?
Will Congress or the White House slash spending for homeland security, the FBI, or CIA, after the near disaster over Detroit on Christmas Day 2009, and the failed bombing of Times Square? Will Democrats and Republicans come together to cut veterans’ benefits, spending for our crumbling infrastructure of roads and bridges, or for education, when Obama is promising every child a chance at a college degree?
Will Reid’s Senate approve of cuts in food stamps, unemployment insurance, or the Earned Income Tax Credit when joblessness is still near nine percent? Will a Senate that increased the budget of each department by an average of 10 percent for 2010 agree to take a knife to federal agencies or salaries when federal bureaucrats and the beneficiaries of federal programs are the most loyal and reliable voting blocs in the Democratic coalition?
Not only has Obama promised not to raise taxes on the middle class, any broad-based tax increase would be poison for him and his party and never be approved by a Republican House. Obama is caught in a dilemma from which there appears to be no escape. Democrats are the Party of Government. They feed it and it feeds them. The larger government becomes, the more agencies established, the more bureaucrats hired, the more citizens receiving benefits or checks, the more deeply entrenched is the Party of Government.
For eighty years, this has been the Democratic formula for success. “Tax and tax, spend and spend, elect and elect” was the pithy depiction of that policy attributed to FDR aide Harry Hopkins. And herein lies Obama’s dilemma. How does the leader of the Party of Government preside over an era of austerity, in which federal employees and federal benefits are radically reduced, to avert a default on the national debt? How can the leader of the Party of Government shrink the government?
Republicans, too, have drawn a line from which they cannot retreat. They will not vote to raise taxes. Not only would that violate a commitment almost all Republicans have made to the people who elected them, it would seem suicidal. Republicans who sign on to tax hikes cannot go home again. For allied to the party today are Tea Party irregulars who shoot deserters in Washington’s tax battles and budget wars.
Republicans are not going to cross these people, for they have before them examples of what happens to those who do. Senator Arlen Specter of Pennsylvania voted for the Obama stimulus and faced an instant primary challenge from former Representative Pat Toomey. Toomey took a twenty-point lead, forcing Specter to switch parties to keep his candidacy alive. Specter is gone and Toomey now serves in the Senate. Tea Party people are not schooled in the Gerald Ford politics of compromise and consensus.
Former Senator Alan Simpson, co-chairman of President Obama’s National Commission on Fiscal Responsibility, has challenged the patriotism of fellow Republicans who plant their feet in concrete on tax increases:
There isn’t a single sitting member of Congress—not one—that doesn’t know exactly where we’re headed.… And to use the politics of fear and division and hate on each other—we’re at a point right now where it doesn’t make a damn [bit of difference] whether you’re a Democrat or a Republican, if you’ve forgotten you’re an American.77
Republicans did go along with Bush’s spendi
ng for trillion-dollar tax cuts and trillion-dollar wars, and for prescription drug benefits for seniors and No Child Left Behind. But Simpson was wrong in implying that “fear and hate” are behind conservative opposition to tax increases.
History and principle are the drivers of conservative opposition to raising taxes. Ronald Reagan, who consented to tax increases in the 1982 Tax Equity and Fiscal Responsibility Act, told this writer he had been lied to by Congress. Promised three dollars in spending cuts for each dollar in tax increases, he got the opposite. George H. W. Bush won in 1988 by telling the nation, “Read my lips! No new taxes!” His breach of faith on that pledge left his loyal followers disheartened and deceived and cost him the presidency in 1992.
Conservatives are resisting tax hikes because they believe government has grown too immense for the good of the nation. If that means putting the beast on a starvation diet—no new tax revenue—so be it. Indeed, many prefer to run the risk of a debt default rather than transfer more wealth from the people and the private institutions that produce that wealth to a ravenous government that cannot control its appetite.
Where does that leave President Obama—and us?
If tax cuts are off the table, defense and war costs are rising, and cuts in Social Security, Medicare, Medicaid, and other entitlement programs are political poison, how do we reduce a deficit of $1.5 trillion? How do we stop the public debt from surging to 100 percent of GDP and beyond? America is facing not just a gridlock in government, but a deadlock of democracy, a crisis of the system and of the state itself.
On November 2, 2010, for the third time in four years, Americans voted to be rid of a ruling regime. The nation is taking on the aspect of the French Fourth Republic, which shifted from one party and premier to another until the call went out from an exasperated nation to General Charles de Gaulle to come and take charge of affairs. Now both parties have lost the mandate of heaven. America is in uncharted waters. The country is up for grabs.
Ours is the world’s oldest constitutional republic, the model for all that followed. But if our elected leaders are incapable of imposing the sacrifices needed to pull the nation back from devaluation or default, is democracy really the future of mankind? Or is the model for the future the state capitalism of a China that weathered the storm better, spent its stimulus money more wisely, and has returned to double-digit annual growth?
How do we get off this highway to default?
America’s fiscal crisis is a test of whether democracy is sustainable. John Adams, like other Founding Fathers, did not think a democracy could be long-lived. “Remember, that democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”78
WHAT HAPPENED TO US?
How did the republic that came through a Depression to win World War II, rebuild Europe and Japan, put a man on the moon, lead the world into an age of prosperity, and triumph over the Soviet Empire after a half century of Cold War come to this?
Where did we make the wrong turn? How did we lose our way?
How, in a generation, did we reach a point where a majority of our people believe America is headed in the wrong direction, that our children will not know the good life their parents had, that the American Dream may never become reality for scores of millions of our countrymen?
The answer: the failure of our system is rooted in a societal failure.
We are not ruled by the same ideas nor do we possess the same moral character as our parents did. Today, freedom takes a back seat to equality. “One nation, under God, indivisible” has become an antique concept in an age that celebrates diversity and multiculturalism. Our intellectual and cultural elites reject the God our parents believed in and the moral code they lived by.
Our fathers warned that, should this happen, the republic would fall. “Virtue, morality, and religion,” said Patrick Henry, “this is the armor, my friend, and this alone that renders us invincible.… If we lose these, we are conquered, fallen indeed.”79
“’Tis substantially true,” said Washington, “that virtue or morality is a necessary spring of popular government.” And the source of virtue and morality, Washington believed, was religion:
Let us with caution indulge the supposition that morality can be maintained without religion.… Of all the dispositions and habits which lead to political prosperity, Religion and Morality are indispensable supports. In vain would that man claim the tribute of patriotism, who should labor to subvert these great pillars of human happiness, these firmest props of the duties of man and citizens.80
Tocqueville found that Americans, half a century later, still shared Washington’s conviction that religion was the pillar of the republic.
I do not know whether all Americans have a sincere faith in their religion—for who can search the human heart?—but I am certain that they hold it to be indispensable for the maintenance of republican institutions. This opinion is not peculiar to a class of citizens or a party, but it belongs to the whole nation and every rank of society.81
“[O]ur ancestors,” said Daniel Webster in his famous Plymouth Rock speech of 1820, “established their system of government on morality and religious sentiment. Moral habits, they believed, cannot safely be on any other foundation than religious principle, nor any government be secure which is not supported by moral habits.”82
Religion is the foundation of morality and only a moral people can sustain a free republic, these men were asserting. Without religion, morality withers and dies, the community disintegrates, the nation falls. Our fathers’ insight goes far toward explaining the current crisis of the republic, for America has ceased to be the Christian country they and we grew up in.
2
THE DEATH OF CHRISTIAN AMERICA
America was born a Christian nation.1
—WOODROW WILSON
This is a Christian nation.2
—HARRY TRUMAN, 1947
… we do not consider ourselves a Christian nation …3
—BARACK OBAMA, 2009
At the 2009 inaugural, the official prayer was offered by Rick Warren, pastor of Saddleback Church, in Orange County, California, and author of The Purpose Driven Life, which had sold thirty million copies.
Warren, who had been attacked for his support of California’s Proposition 8, a constitutional amendment that outlawed same-sex marriage, closed his prayer thusly: “I humbly ask this in the name of the one who changed my life, Yeshua, Isa, Jesus [Spanish pronunciation], Jesus, who taught us to pray, ‘Our father who art in Heaven…’”4
Many Christians were startled that Pastor Warren did not identify Jesus as the Son of God but did identify him by his Muslim name, Isa. For Islam teaches that God had no son, that Isa was not God but a prophet superseded by Muhammad. Warren seemed to be implying that Islam’s view of Jesus, a view that denies His divinity, was acceptable to him.
President Obama followed Warren and repudiated the notion that America is a Christian nation: “We are a nation of Christians and Muslims, Jews and Hindus, and non-believers.”5 For the first time, a president had denied the primacy of Christianity in America. The Supreme Court had declared in 1892, “This is a Christian nation.”6 The President was now declaring in his inaugural that we had ceased to be so.
The age of Obama marks the advent of post-Christian America.
In his inaugural benediction, Rev. Joseph Lowery sustained the theme of inclusiveness and extended it from every religion to every race.
Lord … we ask you to help us work for that day when black will not be asked to get in back, when brown can stick around, when yellow will be mellow, when the red man can get ahead, man; and when white will embrace what is right.7
The next morning, Rev. Dr. Sharon Watkins, general president of the Christian Church (Disciples of Christ), a member of the central committee of the World Council of Churches, strode to the pulpit of Washington National Cathedral as the first woman ever to deliver the homily at the National Pray
er Service.
Determined to be ecumenical, Watkins began with an old Cherokee tale about wolves and wisdom, then pivoted to the Old Testament, saying: “In the later chapters of Isaiah, in the 500’s BCE, the prophet speaks…”8
BCE?
The initials are used by those who wish to be rid of BC, “before Christ.” For centuries, the civilized world has divided history into BC and AD, anno domini, “in the year of the Lord.”
BCE stands for “before the common era,” “before the current era,” or “before the Christian era.” Secularists seek to replace BC with BCE and AD with CE, for “Common Era,” in all historical references—thus eliminating Christ and Christianity as the pivot of world history.
After relating the Cherokee tale of the good wolf and the fearful wolf, Rev. Watkins proceeded to ask:
So how do we go about loving God? Well, according to Isaiah, summed up by Jesus, affirmed by a worldwide community of Muslim scholars and many others, it is by facing hard times with a generous heart: by reaching out toward each other rather than by turning our backs on each other. As Mahatma Gandhi once said, “people can be so poor that the only way they see God is in a piece of bread.”9
This was the sole mention of Jesus. Jesus was not identified as the Son of God or the redeemer of mankind, but as the fellow who had “summed up” Isaiah.
Rev. Watkin’s sermon, “Harmonies of Liberty,” went on to cite Emma Lazarus, Martin Luther King, Obama, and Katharine Lee Bates, author of “America the Beautiful,” who had lived controversially for twenty-five years with fellow Wellesley professor Dr. Katharine Coman. She closed by reciting the final verses of James Weldon Johnson’s “Lift Every Voice and Sing,” which has been called “The Negro National Anthem.”10
To Christians, Christ is the Son of God. Through Him alone can we come to the Father and attain salvation. Yet, Rev. Watkins all but excluded her Lord and his message of salvation when she had a worldwide audience, preferring to take her parable from a Cherokee tale.
Suicide of a Superpower_Will America Survive to 2025? Page 5