Thursday, December 12, 2013

This System is NOT Sustainable

If you look at the numbers, I just saw something, 57% of the American population, in some way, is dependent on some level of government, be it federal, local, or state government. So you've already got more than half the people who are tax eaters, and only 43% of the people who are tax payers. Obviously that situation is not sustainable. It could go on longer. But ultimately, you’re going to destroy economic activity.

The underlying reality of this is that the government doesn't create wealth. They can pump up the GDP numbers by borrowing and spending money, but it doesn't create wealth. Wealth is created by the private sector. All the government does is take wealth away and redistribute it. And if you end up taking too much wealth, if you end up pulling out too many feathers from the goose, the goose is going to start squawking, and all of a sudden the economy is going to collapse.

And I think we’re really seeing that now. The economy has been declining slowly. But we’re in, if not a depression, a very, very severe recession. And basically have been since the collapse in 2008. And the reason why I say that is that, if you look at the median income of the average American adjusted for a true rate of inflation, he’s no better off now than he was ten years ago. In fact, he’s worse off now than he was ten years ago.

So, until you get median family income adjusted for inflation, higher than it was prior to the collapse of 2008, you can’t say that the economy is doing well. It’s doing poorly, and is likely to continue doing even worse given the fact that the government is really just taking, taking, taking. And there’s only so much that the private economy has to give before the private economy collapses.

- James Turk: