Tuesday, September 4th, 2012
Writing in The Wall Street Journal‘s “Saturday Essay,” AEI’s Nicholas Eberstadt raises the question of what will happen to the American character as the United States increasingly becomes “a nation of takers.” Expanding on his AEI talk in June, Eberstadt writes:
What is monumentally new about the American state today is the vast empire of entitlement payments that it protects, manages and finances. Within living memory, the federal government has become an entitlements machine. As a day-to-day operation, it devotes more attention and resources to the public transfer of money, goods and services to individual citizens than to any other objective, spending more than for all other ends combined.
The growth of entitlement payments over the past half-century has been breathtaking. In 1960, U.S. government transfers to individuals totaled about $24 billion in current dollars, according to the Bureau of Economic Analysis. By 2010 that total was almost 100 times as large. Even after adjusting for inflation and population growth, entitlement transfers to individuals have grown 727% over the past half-century, rising at an average rate of about 4% a year. [...]
The U.S. is now on the verge of a symbolic threshold: the point at which more than half of all American households receive and accept transfer benefits from the government. From cradle to grave, a treasure chest of government-supplied benefits is there for the taking for every American citizen—and exercising one’s legal rights to these many blandishments is now part of the American way of life.
With these daunting statistics, Eberstadt worries that as Americans become more and more dependent on government payments, “the proud self-reliance that struck Alexis de Tocqueville in his visit to the U.S. in the early 1830s” will be threatened:
The American “individualism” about which [Tocqueville] wrote did not exclude social cooperation—the young nation was a hotbed of civic associations and voluntary organizations. But in an environment bursting with opportunity, American men and women viewed themselves as accountable for their own situation through their own achievements—a novel outlook at that time, markedly different from the prevailing attitudes of the Old World (or at least the Continent).
The corollaries of this American ethos were, on the one hand, an affinity for personal enterprise and industry and, on the other, a horror of dependency and contempt for anything that smacked of a mendicant mentality. Although many Americans in earlier times were poor, even people in fairly desperate circumstances were known to refuse help or handouts as an affront to their dignity and independence. People who subsisted on public resources were known as “paupers,” and provision for them was a local undertaking. Neither beneficiaries nor recipients held the condition of pauperism in high regard. [...]
The prospect of careening along an unsustainable economic road is deeply disturbing. But another possibility is even more frightening—namely, that the present course may in fact be sustainable for far longer than most people today might imagine.
The U.S. is a very wealthy society. If it so chooses, it has vast resources to squander. And internationally, the dollar is still the world’s reserve currency; there remains great scope for financial abuse of that privilege.
Such devices might well postpone the day of fiscal judgment: not so the day of reckoning for American character, which may be sacrificed long before the credibility of the U.S. economy. Some would argue that it is an asset already wasting away before our very eyes.
Read Eberstadt’s entire WSJ article here, and the full essay from which the article was excerpted can be read over at Templeton Press. William A. Galston of the Brookings Institution responds to Eberstadt, arguing that “left unchanged, the programs that we have created in the past half-century will make it difficult to stabilize our finances, to invest in the future and to defend the country. These are compelling reasons to rethink and reform the entitlement state. But they have little to do with an alleged culture of dependence. America’s distinctively individualist ethos is alive and well.” Read Galston’s response in The Wall Street Journal here, and the full thing at Templeton.