Clifton Robinson: Are we in America emulating the wrong nations?

CLIFTON ROBINSON Robinson Media

Sunday May 30, 2010
 
 

Some years ago my dear friend, local philanthropist Bernard Rapoport, and I visited Greece. What most strikes you about this ancient cradle of democracy is the ruined temples you come across. Little proclaims their age or greatness. They sit along the roadside, utterly unattended, left to the ravages of the elements or worse.

It’s instances like these when you realize the great passage of time and the sad transition that all too often accompanies it. And it’s natural to think on today’s world and our own nation.

Certainly, the ills of the Western world’s economic situation appear to be worsening as we learn more and more of some wildly irresponsible European Union countries and their massive underfunded social programs. Sound familiar?

If you were a financially responsible member of the European Union, would you feel good about paying the tab for irresponsible members? Sound familiar?

Irresponsible entities, whether they be government, corporations, individuals or otherwise, should not be a burden to those who use good judgment, common sense, thrift and prudence in managing their affairs.

Fear of EU collapse

As important members of the EU contemplate future action concerning their viability and existence, the entire world quakes at the thought of a breakup of European Union countries. My fear is financial chaos will ensue. The resulting quake will be massive compared to our present recession — and all because of reckless public spending on social programs.

Sound familiar yet?

However well-intentioned, some American progressives have long favored European social models — that is, big government, high taxes, public unions, private unions, short work weeks, high wages and early retirement benefits with full socialized medicine. Sound familiar yet?

Shortly after World War II, European countries elected governments to lead them to this promised land. That seemed to entail creating a multitude of programs. Public and private sector union demands for higher wages, fewer work hours, publicly funded medicine, longer vacations and earlier retirements created an environment of non-competitiveness in world markets, low productivity, higher taxes and malaise from younger workers who understandably resented paying for retirees as young as 50.

The deficits amassed under this model have now undermined the sustainability of the entire EU and placed the value of the euro in question. Leading economists agree the European Union in its present form will not continue to function. Its unraveling is unthinkable because of massive, tightly integrated markets — integrated with our own.

They never go away

Entitlement programs are relatively difficult to unwind as seen by rioting in the streets of Greece, the EU member most troubled by this predicament. The riots have been ignited by freezing runaway pensions, raising retirement age from 55 to 65 and trimming public sector pay and pensions. Unions and Socialist Party members are furious across the entire European Union over mere mention of cutbacks in any sector. Entitlements once gained are never to be taken away, regardless of ability to fund them.

In the United States public sector, unions have collaborated with politicians to create the same situation that exists in the EU by creating big pension “defined benefit” plans vs. private sector pension “defined contribution” plans. The former plans are entirely paid by the employer; the latter finds employee contributions matched at some level by the employer.

The former arrangement also creates massive unfunded liabilities over time. Unfunded liabilities in the public sector already afflict many states and cities across our nation. The additional medical expenses of the recently passed health insurance overhaul will be the final nail in many states’ coffers.

Historians tell us nations have definite life cycles. It behooves us to be mindful of ours. Nations are born, spring into infants, evolve into juveniles and mature to golden age — and then go into decadence. Europe has already matured and slipped into decadence. Is this the model for our nation? Is this what we wish to emulate?

For some the answer is yes. For others the answer is no. Our only way to keep from falling further into a something-for-nothing society is our vote.

November is a crucial turning point in American history. Will we steer our nation into decadence — or are we already there?

Clifton Robinson is chairman of Robinson Media, which owns the Tribune-Herald .

 

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