At fascism’s doorstep
By Dave Duffy
Issue #57 • May/June, 1999
Fascism and socialism are the political philosophies that hold that the state should control a country’s means of producing wealth. Where socialism seizes the money-producing industries outright, fascism leaves much of the private sector intact but tightly controls it through government management. Otherwise there’s barely a nickel’s worth of difference between the two political systems. Germany and Italy were the prime fascist states during World War II, and communist countries like China, Cuba, and the former Soviet Union are the modern socialist states. These states always come to ruin, because state control of people’s lives is an unworkable idea. It goes against human nature, and, historically, fascism and socialism have only been maintained by government force, until the enslaved and impoverished people rebel and bring down the government.
Despite fascism’s and socialism’s disastrous records, which includes not just the financial ruin of the countries that adopted them but a legacy of imprisonment and murder of millions of the citizens of the unfortunate countries, the appeal of these unworkable systems is still strong in many countries, including this one. If you want a bold new example, just take a look at President Clinton’s proposal to save social security in America, and witness the response—or rather, the lack of outrage—from Democrats and Republicans in the U.S. Congress.
Under the guise of trying to save social security, which accounts for nearly 22% of all federal spending, President Clinton has proposed that a large portion of social security trust fund money be invested by the government into the stock market to earn a greater return for future retirees. His proposal is a bastardization of financial studies that conclude that social security recipients would be far better off if the social security system were privatized, so that participants, instead of investing money into a system that nearly everyone agrees cannot survive as presently structured, were allowed to invest their social security tax dollars into the private sector. Among the many compelling reasons cited by these studies: The private sector has earned 8% in real money over the past 75 years (including the Depression years), while the government’s social security has earned 2%—not in real money but in government IOUs.
Clinton’s proposal, however, would allow the government, not social security participants, to invest the money in the stock market, thus maintaining government ownership and control over the funds. Due to the large sums involved—about $650 billion—it would give government direct management control over nearly every major American business in America, opening the door to political pressures about how those companies do business. As has already been demonstrated by some state and county pension funds that already invest in the stock market, politics will replace sound financial management as the criterion for investment. For example, environmental companies would get lots of government investment, while tobacco companies and others who do not toe the party line would get nothing. The result would be the undermining of sound financial investment with the political-expediency of investing public money into socially desirable businesses.
Incredibly, few congressmen are calling this proposal for what it is, namely, a barely veiled attempt by opportunistic politicians to subvert America’s free enterprise system, which is the foundation upon which this country is built.
The Clinton plan would capitalize on Americans’ fears that the social security system is on the verge of bankruptcy, that the social security trust fund has only government IOUs in it, and that their social security retirement money is no more secure than a White House intern in the oval office. These fears are all well-founded, because social security is going broke and action needs to be taken to save it. But Clinton’s solution is not an attempt to save social security, but an attempt to inject major government control into the American economy.
Just as he attempted to nationalize one fifth of the nation’s economy under the pretense of health care reform, Clinton now is attempting to put government control over American business under the guise of saving social security. Alarm sirens should be going off inside the heads of all freedom-loving Americans. It would mean the greatest increase in federal power since the introduction of the income tax; not even Roosevelt, at the height of the New Deal, proposed government control of American industry.
Truly privatizing social security by allowing participants to invest in 401K and IRA type accounts in the private sector would not only save social security by dramatically increasing participants’ future retirement benefits, but it would increase the country’s economic growth by making more money available for investment. However, letting the government invest the money in the stock market would strangle the private sector with government control, just as government has strangled it in other state-controlled economies. Saving social security would then become a moot point, because the economy will have been ruined, taking social security along with it.
Opportunists like Clinton and his fellow Republicrats are not interested in meaningful reform. They are interested in seizing the panic of the moment to further their own misguided socialist view of America’s future. Don’t let them! If Clinton can sneak this dirty trick past a gullible public and through a Congress that lacks the guts to stand up to this would-be dictator, then the American system will fall without a shot being fired. This sinister proposal places America at fascism’s doorstep.