Capitalism's Insurance Not Citizens' "entitlements"

By Beryl Wajsman, Editor, The Suburban

The global economic crisis has led many commentators and politicians to engage in heated debate over the appropriate balance between increasing government revenues and decreasing government spending. With sovereign debt in doubt throughout the west, the debate is sorely needed. But what is not needed is the hijacking of language and the misrepresentation of the issues that flow from that act by placing the vulnerable among us at greatest risk.

Over the past few weeks the word “entitlement” has been used to describe the social security programs in place broadly in the west since the Great Depression as well as the medicare programs that came later. It is always followed with a comment that they need to be reduced. The use of the word “entitlement” is a gross distortion.

Seniors’ pensions, employment insurance and medicare are not “entitlements” with the implication that citizens somehow feel they are owed these at no cost. These programs are insurances for which we pay dearly through our taxes. And the first two began as capitalism’s insurance.

Too many of those who shape opinion today have little sense of history. They would do well to remember that the 1930s almost brought an end to the free market system. It had been mercilessly ravaged and pillaged. One third of this continent was left destitute. Another third teetering on the edge.

It happened because human greed knew no limits while human reason and compassion were in short supply. President Roosevelt realized – in addition to his sincere concern for the suffering – that without constraints on the privileged and a security system for the vulnerable, not only was capitalism likely to fail, but revolution could not be ruled out. Just eighteen months before his inauguration he had witnessed 10,000 veterans encamped in the park in front of Congress for a month demanding that they be paid some form of pension so they could survive the Depression. Republican President Herbert Hoover ordered Generals Douglas MacArthur, Dwight D. Eisenhower and George S. Patton to lead an armored corps supported by tanks and force the “Bonus Army” protesters – all World War I veterans – out of Washington. Some twenty were killed, hundreds wounded. It was the first time the Army of the United States was called into the streets of the Capitol for a military operation since the Civil War.

The social security system that arose out of the havoc of the Depression was the highest and best promise of industrial liberalism. It is not a gift. It is insurance [emphasis added]. One we pay for as we do with medicare. It is an appropriate and essential part of the services that a state must provide its citizens. Services offered by the state and paid for by us. And herein lies the problem that we must cure.

Over the past four decades western politicians have forgotten that the primary responsibility of government is the provision of essential services, not social engineering. They’ve forgotten that they are called public servants. Instead, they have engaged in a frenzied orgy of prohibition and regulation truly unmatched in modern history. They have perverted the liberal industrial state into a nanny state with armies of bureaucrats and inspectors giving them more power over “we the people.”

The groaning corpus of prohibitory law and legislation now takes up from 18-25% of budgets, depending on the jurisdiction, just to enforce. The yoke of the burden is so heavy today that small businesses in Quebec, for example, must spend 19 full working days a year complying and completing government requirements. The burden is not much lighter in the rest of Canada or in the United States. In Europe the situation is so onerous in countries like Italy, that the European Bank has made de-bureaucratization
and liberalization conditions for an economic bailout of that country.

This is not to say that changes are not needed in our social security system. We need to allow some private medical care. We need to reform state pensions so that those who need them get more while the rich don’t. We need to expand job re-training and skills development in our employment insurance system. But we also need to get rid of tax breaks like the oil depletion allowance for instance. It’s not a one way street. Before politicians demonize the public by calling our social security insurance “entitlements” and seek to cut them, let them cut the nanny-state out and get real savings and use them to help those in need,streamline and reform the system, reduce our national debt and secure our futures.

Yes, I know it’s hard for them. They will lose some of their command-state power. But we, the people, will gain an “entitlements” that are the true birthrights of every citizen of a free society. Freedom from fear and freedom from want. The entitlements from governments that serve not control.

If we will it, we can make it so.