Entitlement Spending Creates a ‘Nation of Takers’

Entitlement Spending Creates a ‘Nation of Takers’


How this new spending is destroying American masculinity, families and character

America’s entitlement spending is destroying the economy. But political economist Nicholas Eberstadt isn’t worried about that. In an article published in the Wall Street Journal August 31, Eberstadt argued that the effect entitlement spending is having on the nation’s character is far more dangerous.

He outlines a shocking increase in entitlement spending: 727 percent in the last 50 years. And that’s after adjusting for inflation and the increase in population.

“Within living memory, the federal government has become an entitlements machine,” he wrote. “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.”

In a longer version of his Journal essay, published by Templeton Press and available here, Eberstadt meticulously backs up his claims with a wealth of data that even his critics do not dispute.

The shocking facts run against the popular historical narrative. For example, Eberstadt points out that America’s defense spending places a smaller burden on America’s economy now than almost any point in the Cold War. America spends 4.8 percent of its economy on defense. In 1961, when President Dwight Eisenhower warned of a “military-industrial complex,” 9.4 percent of America’s gdp was spent on the military.

In fact, since September 11, it hasn’t been out-of-control military spending inflating America’s debt bomb, but escalating entitlement spending.

American families, specifically American men, have borne the full brunt of the resulting attack on character, argues Eberstadt. He devoted considerable attention to making this point in the full essay, but the Wall Street Journal overlooked it.

“The adverse influence of transfer payments on family values and family formation in America” is critical, he writes. Earlier studies showed “that the perverse incentives embedded in federal-family support policies were actually encouraging the proliferation of fatherless families and an epidemic of illegitimacy,” he wrote. The payments were “a vehicle for financing single motherhood and the out-of-wedlock lifestyle in America.”

Manhood was also directly attacked. “Before the age of entitlements, self-reliance and the work ethic were integral and indispensable elements of the ideal of manliness in America,” he wrote.

“Put simply the arrival of the entitlement society in America has coincided with a historically unprecedented exit from gainful work by adult men,” he continued. And once again, Eberstadt commands a battery of statistics. Most surprisingly, more able-bodied American men shirk work than in almost all of Europe, despite the Continent’s infamy for entitlement spending.

Eberstadt’s numbers also show that America is tolerating widespread cheating. In 1960, 455,000 people received government payments for disability. In 2011, it’s 8.6 million. Nearly half of all these payments go to people suffering “mood disorders” or sicknesses affecting “musculoskeletal system and the connective tissue,” like back pain. These two are almost impossible for doctors to diagnose.

The entitlement system draws millions of people into a lifestyle of lying and cheating. And Eberstadt doesn’t just blame the claimants of the disability pay. The doctors and health care workers that allow this are “collaborators,” as is the U.S. judicial system. American voters and politicians are “willing and often knowing enablers.”

Finally, Eberstadt shows that the system drafts society into the robbery of “a pool of citizens who can offer no resistance to such schemes: the unborn descendants of today’s entitlement-seeking population.”

Far from being “pay as you go” systems, entitlements like Social Security and Medicare are in fact massively underfunded. Eberstadt blames “the impulse to take benefits here and now, and leave it to other people later on to figure out how to pay for it all.”

This is the sort of “taking” mentality that this entitlement system has fostered.

Man’s whole system is fundamentally flawed. To read more about this, and the contrast with what a God-inspired system would look like, read our article “The United Welfare States of America

France and Germany Join Forces to Combat Economic Crisis

France and Germany Join Forces to Combat Economic Crisis


Germany and France announced last week the creation of a joint group seeking to improve the EU’s banking situation and advance its monetary union. German Finance Minister Wolfgang Schauble said the two nations wanted to make “joint decisions” to battle the Continent’s ailing economy. French President Francois Hollande was forward enough to call the cooperation of France and Germany concerning the crisis the key to the “reorientation of Europe.”

At present, political moves in Europe are focused on creating a single regulatory entity over the European banking system. In a statement last week, President of the European Commission Jose Manuel Barroso explained:”The additional measures that Europe needs must be firmly rooted in a commitment to deeper integration. … We must go beyond cooperation and establish an EU-wide supervisory authority, particularly in the eurozone. … A single rulebook for financial services is being put in place for the single market. Building on this, a single European banking-supervision authority would open the way to direct recapitalization of banks through the European Stability Mechanism.”

The emphasis is on a single rulebook for a single market regulated by a single supervisory body. Europe wants to unite financially, which is virtually impossible without further political integration.

Der Spiegel reported this week that German Chancellor Angela Merkel is pushing for a constitutional convention before the end of the year. Hans Kundnani said such a convention could either “dramatically reshape” Europe or lead to it “falling apart.” It’s a risk, but Germany views it as a necessary one.

Germany is poised to become the power behind this single European power (see Chapter 5 of our free booklet Germany and the Holy Roman Empire). France can see that, and it doesn’t want to get left behind.

Following the precedent of former President Nicolas Sarkozy, France has been seeking an increasingly closer role with Germany. By doing so, it boosts Berlin’s influence and sway in developing European policies. Throughout history, however, the two nations have not been the most peaceful neighbors. Germany was quick to overrun French borders in two world wars, at one point occupying the country. France was once the undisputed power of Europe, but, since Napoleon, it has not been the primary power.

A report in the June 1969 Plain Truth said this: “Regardless of whoever is at the helm of France’s government, from now on you will see more chaos and instability! She will stumble from one crisis to another—playing a subordinate role to Germany! This is absolutely certain.”

Don’t think this new level of Franco-German cooperation, discussed last week, is evidence of cooperation between equals. As the 2008 financial crisis clearly illustrated, France is the lesser power of the two, and Germany is not likely to allow Paris to forget that. Germany is certain to dominate a new, unified European power, and the current banking crisis will hasten that end.

Egypt: Female Newscaster Wears Hijab

Rana Ossama

Newsreader Fatima Nabil delivered the evening news on Sunday evening wearing the Muslim hijab headscarf. It marked the first time that a woman has worn the Islamic veil on the state television channel since its first program aired in 1960.

Wearing the veil during a newscast had been banned for decades under the regime of former President Hosni Mubarak. Egypt’s new, Islamist-dominated government lifted the ban, and many secularists are now worried that the new government will enforce an increasingly strict adherence to Islam.

Many Western analysts saw the fall of Mubarak’s government as a positive development and a doorway to democracy in Egypt. The Trumpet, however, has been writing for nearly 20 years that Egypt is not destined for democracy, but a sharp turn toward Islamic radicalism. Editor in chief Gerald Flurry wrote in July 1993 that a “radical change in Egyptian politics” was about to occur. Mr. Flurry based that forecast on Bible prophecy—specifically Daniel 11:42.

Fatima Nabil’s historic decision to wear the hijab puts a face to this fact: Daniel’s ancient prophecy has now been fulfilled.

The Land Down Under About to Go Under

The Land Down Under About to Go Under

Amy Coopes/AFP/Getty Images

China’s economy is tumbling. Will it bury Australia?

Australia is no Spain. That’s what Australia’s Deputy Prime Minister and Treasurer Wayne Swan said in July, replying to comments made by Andy Xie, a Singapore-based economist who said Australia is in danger of becoming Spain or Ireland.

It might come to a shock to people living in Australia that outside analysts are comparing the nation to countries in deep financial turmoil. As Wayne Swan said, “What planet does [Xie] live on?”

But Australians need to wake up to the fact that much of their prosperity could be very fleeting.

According to Andy Xie, Australia’s Achilles’ heel is its heavy reliance on China. China is now Australia’s largest trading partner, eclipsing both Japan and the United States.

The relationship between Australia and China today is similar to the relationship between Africa and the Europeans during the colonial era. China is using Australia as an easy and reliable place to obtain raw, unprocessed, non value-added materials in bulk quantities. Australia’s world-class mines run flat out to supply China’s demand.

This has been a fantastic opportunity for Australia. Over the past decade, prices of Australia’s exports have skyrocketed. Iron ore has jumped from $12 per ton to over $180 per ton in 2010. Thermal coal went from $40 per ton to around $140 last year. Gold went from around $250 per ounce to almost $1,900 last year. Copper, wheat, aluminum—you name it—it has all exploded in price.

Consequently, tens of billions of dollars are dumped into Australia per year. It has given the opportunity to many Australians—even those with just high school educations—to earn six-figure salaries.

Yet the relationship with China has not been all good. Despite the money bomb that has been dropped on Australia due to high commodity prices, Australia continues to see its manufacturing sector erode. Australia’s persistent trade deficit is case in point. Despite the massive amount of income it receives selling ore to China, it spends even more money importing Chinese finished goods. July was the fifth month in a row it spent more than it earned. This is a trend with ominous implications.

Australia has a “classic case of the Dutch Disease,” writes economic analyst Jonathan Tepper. While Australia’s natural resources are increasingly exploited, its manufacturing capability is withering.

During Europe’s colonial days, the advanced economies bought the raw resources from the colonies, turned them into finished products and then sold them back to the colonies for a profit. The result was a win for both, but a greater win for the advanced economy, which grew its manufacturing expertise and earned the greater share of the wealth. The colony tended to stay manufacturing underdeveloped and generally dependent on the colonial power.

In July, one of the contributing factors to Australia’s trade deficit was its growing reliance on imports of heavy machinery—the very machinery created from, and needed to extract, its own resources. In this case, China is acting more like the advanced economy (creating the high-tech, value-added products Australia needs), while Australia more like the African colony (exporting the raw, unprocessed ores). The fertilizer industry is another startling example. Australia has vast amounts of natural gas, which is used to create fertilizer. Instead of producing it at home and exporting a value-added product to the world, Australia ships liquefied natural gas to other countries, and then imports the fertilizer.

But now Australia’s boom times may be nearing their end.

As I wrote last week, China’s command economy is drastically slowing and may soon face its biggest test yet. The Telegraph’s Ambrose Evans-Pritchard writes that reports from China give cause for worry, and that during the summer China’s export growth fizzled. The New York Times reports that unsold goods are piling up all across China. Factories are stuffed to the gills with unsold inventory. Exports are crawling to a halt. Automobile factories are running at 65 percent capacity and still stuck with a glut.

China’s export machine is not the only one failing either. Japan, Australia’s second most important trade partner, is in serious trouble too. In July, Japan’s exports fell 8.1 percent on an annual basis.

And now commodity prices appear to be tumbling. The price of Australian iron ore has plummeted by 50 percent since its highs in 2011. Australian thermal coal is down by 35 percent, and slumping. The list goes on.

With the world’s largest economies in contraction, global trade is collapsing.

On August 22, bhp Bilton, the Australian-owned mining giant, announced that it had halted construction on its massive $20 billion Olympic Dam mine in the state of South Australia. It was to be the largest copper and uranium mine in the world. bhp noted a 35 percent slide in profits. The company is already warning about layoffs.

“The resource boom is over,” Australia’s Resources and Energy Minister Martin Ferguson said following bhp’s announcement.

If he is right, tough times are coming. Resource exports provide 7 percent of the nation’s gdp and 50 percent of its all important export earnings. It is these export earnings that backstop much of Australia’s banking sector—and that provide the fuel for Australia’s real estate sector.

“As global commodity prices come down, mining will decline and the property bubble will burst, warns Andy Xie.

If the housing bubble busts, Australia’s banking system will be decimated just badly as America’s was in 2008 and Spain’s or Ireland’s was shortly thereafter.

Australians beware: The good times are almost over. The signs are there if you only look. China is slowing. Japan is slowing. Commodity prices are plummeting. Manufacturing is struggling. National house prices are now falling. Qantas is scrapping its contract to buy 35 Dreamliners. The banking sector is hugely leveraged to the most expensive property market in the world. Eighty percent of Australia’s national debt is owned by foreigners.

And a deputy prime minister is denying comparisons with Spain and Ireland.

Barroso: EU Needs New Treaty

Barroso: EU Needs New Treaty

Frederick Florin/AFP/Getty Images

European Commission President Jose Manuel Barroso called for EU nations to sign a new treaty as he called for “greater unity” within EU, during his first major speech after the summer break, September 1.

His speech comes after reports that Germany has been quietly making the same proposal despite it being opposed by most EU nations.

Speaking at a convention of supreme court judges in The Hague, Barroso said that power at “the European level has yet to be consolidated to such a degree” that the EU can effectively solve its problems.

“We are experiencing a situation in which we need greater unity and coherence between our policies, as well as greater legislative harmonization,” he said. “And, to achieve all this, we need greater institutional integration.”

“The crisis has made it clear that we must not only complete the economic and monetary union, but also pursue greater economic integration and deeper political and democratic union with appropriate mechanisms of accountability,” he explained.

Barroso also brought up one of the great contradictions in this crisis. “We need more integration, and the corollary of more integration has to be more democracy,” he said. This is a common sentiment from Eurocrats. But more integration and more democracy are mutually exclusive: The people of Europe want less integration. To Barroso and his ilk, integration comes first; the people don’t get a say about that. The EU remains a fundamentally undemocratic project.

But much of his analysis mirrors what the Trumpet has been saying for years. “The present crisis has shown the limits of individual action by nation states,” Barroso said. “Europe and the principles of the treaty need to be renewed. … This European renewal must represent a leap in quality and enable Europe to rise to the challenges of the world today by giving it the tools it needs to react more effectively and to shape and control the future.”

To survive the crisis the eurozone does need to react more effectively. It needs closer integration. Which is why this integration will happen, whether all the member states want it to or not.

Some, probably many, will opt out of this integration. But Barosso is right, the crisis is forcing Europe to unify, which is exactly what Europe elites designed the crisis to do.

For more information on the design behind this crisis, read our article”Crisis in Europe: A Classic Whodunit

Merkel’s Beijing Visit and the ‘Great Mart’

Germany cements its “special relationship” With China.

German Chancellor Angela Merkel traveled to China on August 30 with the largest group of German business representatives to ever visit the nation. Nine ministers accompanied her, as the German and Chinese cabinets held one of their regular joint cabinet meetings.

During the visit, Merkel’s second this year, she met with her counterpart, Chinese President Hu Jintao, and his likely successor, Vice President Xi Jinping. The heads of German conglomerates such as Siemens, Volkswagen, ThyssenKrupp, basf and others were among the 24 corporate executives on the trip.

German officials praised the “special relationship” between China and Germany ahead of the visit. The Wall Street Journal notes that such a term is “usually reserved for close allies such as the U.S. or France.” China also appears to consider the relationship special: It holds regular cabinet meetings with no other nation.

Merkel is trying to boost trade between Europe and China as global economic growth has slowed. China is Germany’s fast-growing export market, with German exports to China having doubled between 2005 and 2011. Over the same period, German exports to the rest of the EU grew by only 24 percent.

“China is battling with the USA for the position as the most important market for Germany outside the EU,” President of the Association of German Chambers of Commerce and Industry Hans Heinrich Driftmann said.

One of the several contracts signed during the visit was for China’s icbc Leasing to by 50 Airbus aircraft for $3.5 billion.


Merkel seems to have succeeded in another key goal of the trip: allaying Beijing’s anxiety about Europe’s weighty government debts. Chinese Premier Wen Jiabao said that talking with Merkel left him “more confident” that the crisis would be solved, though he also said that indebted countries must “have the determination for reform.”

China is putting its money where its mouth is. They recently promised to loan $40 billion extra to the International Monetary Fund (imf).Spiegel Online describes the ulterior motive behind China’s support: “China also has an interest in the survival of the euro. In the long term, Beijing wants to establish its own currency, the renminbi, as the global reserve currency, next to the US dollar. It needs the euro to break the dominant position of the American currency in the long run. Thus, for as long as the Germans support the euro, the Chinese will also do so.”

This gets to the roots of the “special relationship” between China and Germany. Both have strong economic incentives for cooperation. But both also have a political interest in creating a strong axis that opposes the United States.

At its heart, this relationship is about America’s two biggest potential rivals building each other up in order to challenge the U.S.

China and Germany are two nations united by a common rival.

The Bible prophesied of this alliance hundreds of years ago. It is also forecast that this rivalry would be a great threat to America. The Bible talks specifically about a “mart” of nations, or an economic alliance between Europe and some Asian powers.

For more information on the earthshaking alliance that is rapidly congealing, read our article “The Great Mart.”