I have spent the last couple of weeks re-reading a book I read while in graduate school. The book is "The Crisis of the Old Order" by Arthur Shclesinger Jr. and it is widely considered the seminal political-economy book on the Great Depression era. Schlesinger's main thesis (and the most recognizable line from the book), is that FDR "saved capitalism from the capitalists". His praise for FDR and the New Deal is gushing, bordering on school girl infatuation, but it is not without its merits. Many of the socio-economic changes that came about under the New Deal did a great deal of good for the American people (the FDIC, Glass-Steagall Act which prob never should have been repealed just to name two).

However, I have been unable to move on from his contention that FDR saved "capitalism from the capitalists", after all many world renowned economists have argued WWII did as much, if not more, than any New Deal legislation to end The Great Depression, but what is inarguable is how much FDR changed capitalism in America. Farm subsidies, Social Security, Unemployment Insurance, a government led/driven economy, and confiscatory tax rates all got their start under FDR, and an argument could very easily be made that every year since the United States has moved further and further away from free market capitalism, and closer to a collectivist/socialist nation, culminating with the election of Barak Obama (who by taking over GM essentially took capitalism from the capitalists).

No other New Deal program illustrates this point better than Social Security, it is the crown jewel of socialism in America. We need to be clear about one thing, Social Security is nothing but a glorified Ponzi Scheme, it's Bernie Madoff on steroids, and it could ultimately bankrupt this country. If it was run by anyone other than the US government it would be shut down, and the people in charge would be imprisoned. The program is insolvent, and yet no one has dared to touch it, because it has always been considered the "3rd rail of American politics". Essentially our fearless leaders have refused to reform the program b/c retirees (read old people) always show up on election day. Rather than do what is in the best interest of the country, our elected officials refuse to reform Social Security b/c they fear being voted out of office. On behalf of everyone under 40 allow me to say thanks for straddling us with massive debt b/c you are spineless.

What is even worse is the Social Security tax is higher on those who are self employed. Nothing like rewarding good old fashioned ingenuity and hard work huh? Start your own business, be rewarded with higher taxes---where do I sign up?? I defy anyone to explain to me how this is equitable, or better yet why when Congress passed the Social Security Act in 1935, it excluded federal, state, and local government employees from mandatory coverage. Does anyone seriously think if given the chance we wouldn't all opt out from Social Security?? But we aren't given that chance, and in all likelihood never will be. Social Security is wealth redistribution, from the young to the old. The money is never invested, it is simply transferred, to call it anything but socialistic is misguided at best, ignorant at worst. The system needs to be done away with, the problem is we are in so deep there is no easy way out, if there is any way out at all.

Confiscatory tax rates also got their start in the Depression. It was William Foster who proposed "steep taxes on incomes, profits and inheritances". Foster, in referring to the rich said "we should take from them a sufficient amount of their surplus" to essentially redistribute those monies to jump start the economy(the quote is on 187 of Schlesingers book). Pure socialism, and sure enough guess what happened? The top marginal tax rate in 1931 was around 25%, it more than doubled in 1932 to 63% and continued to gradually increase to 79% in the late 1930s, then around 88% in the 1940's and it maxed out at an astonishing 91% in the early 60's and stayed around 70% until the Reagan Revolution. There can be no other reason to have such astronomical tax rates other than wealth redistribution. What would be any ones motivation to make a single nickel above the floor where the top marginal rate kicks in? In the 60's any income over 400k was taxed at 91%!! Why bother making another penny over that amount when the government would confiscate 91 cents out of every dollar?? Finally in 1964 the top tax rate was reduced by something like 20% (still leaving it at an absurd 70%) and guess what happened? Liberals these days would have us believe that such a drastic tax cut would leave tremendous shortfalls in the government budget but in reality the GNP rose 10% in the first year and federal revenues dramatically increased throughout the 60's.

LBJ must have felt this was a good time to continue the movement toward socialism and introduced his Great Society, specifically the enactment of Medicare and Medicaid, and a War on Poverty. I guess on paper it seemed like a good idea, maybe in theory it worked (in theory everything works, even communism works IN THEORY). But as a jumping off point ask yourself the question when was the last time government got involved in something and made it better or more efficient? How did the government do with the rail roads? The postal service? How about public transportation in most major cities--are they efficient? does it turn a profit or break even? NO, NO, NO a thousand times NO!

Johnson laid the groundwork for socialized medicine by extending benefits to everyone over age 65 regardless of need through Medicare and to welfare recipients of all ages through Medicaid. Those benefits of course are paid for by those who do not receive them, sounds fair doesn't it? On top of it Medicare is projected to run out of money in about 10 years (2019). In 2008 Treasury Secretary Henry Paulson, one of the trustees, warned that the country was facing a fiscal train wreck unless something was done. He was quoted as saying "Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America's future prosperity," Paulson said(found this quote online b/c I wanted to make sure I did not misquote Mr Paulson). I guess maybe Medicare sounded good....in theory. And now our current president wants to tax employee benefits and has discussed adopting a single payer system. Let us not forget it wasn't even until 1913 that there was a federal income tax, and now our president wants to tax health benefits!

How can we draw any conclusion other than America has gradually moved further and further away from our roots of rugged individualism, small government, and a libertarian country that was born out of a set of ideas that have become nothing more than rhetoric for politicians to use, rather than things worth dying for. Since FDR allegedly saved "capitalism from the capitalists" America has become a big government, nanny state. A country in which roughly 44-47% of the people pay no federal income taxes at all! Taxes have risen for the rest of us, social programs have been launched at our expense that threaten our future prosperity. We are living in a time where the few pay for the many and I can't help but wonder....When does Atlas shrug?