Art Cashin On The New Normal's New Populism: 165 Million As State Dependents?

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Some must read observations on the dangerous path down which American society is headed.

Via UBS Financial Services

A Somewhat Ominous Op-Ed Recalls A Manufactured Ominous Quote – An op-ed in Forbes last week by Bill Wilson is causing some buzz in Wall Street watering holes. Its title is "165 Million Americans Are Dependents of the State: Is Tyranny Next?" Here's a bit of the essay:

Is America descending into a dependency state, where the majority uses its voting power to demand government services from taxpayers?

 

New research from Ranking Member of the Senate Budget Committee Jeff Sessions (R-AL) reveals that this reality may already be here, with more than 107 million Americans on some form of means-tested government welfare.

 

Add to that 46 million seniors collecting Medicare (subtracting out about 10 million on Supplemental Security Income, Medicaid, and other senior-eligible programs already included in Sessions’ means-tested chart) and 22 million government employees at the federal, state, and local level — and suddenly, over 165 million people, a clear majority of the 308 million Americans counted by the U.S. Census Bureau in 2010, are at least partially dependents of the state.

 

Since President Obama took office in 2009, eligibility for Medicaid, food stamps, the earned income tax credit, the making work pay tax credit, and unemployment benefits has increased by roughly 10 million. …….

 

But it’s even worse than that. In fact, most voting-age Americans do not pay income taxes — approximately 50.6 percent.

 

That includes 53.91 million Americans who pay nothing in income taxes, and another 64.7 million who get refunds in excess of what was owed. That’s 118.61 million out of 234.6 million Americans 18 years and older, based on data compiled by the Joint Committee on Taxation and the U.S. Census Bureau.

 

The U.S. Constitution was designed to protect against such an outcome. The Founders did not want a democracy, which tends to be problematic because of the failure of minority rights to be defended against an arrogant or authoritarian majority. So, instead, the Founders created a republic.

 

In Federalist No. 10, James Madison wrote that in democracies, “governments are too unstable, [and] the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.”

 

Madison prescribed “curing the mischiefs of faction”, including a tyranny of the majority, by “controlling its effects”. Madison warned that “a pure democracy, by which I mean a society consisting of a small number of citizens, who assemble and administer the government in person, can admit of no cure for the mischiefs of faction.”

 

So, the “majority, having such coexistent passion or interest, must be rendered, by their number and local situation, unable to concert and carry into effect schemes of oppression.” But how?

 

Instead of everyone gathering on a hill and voting on laws, the scheme of representation was established, wherein we elect our representatives to make decisions. Also, having a large, geographically wide republic and constitutional limits on the powers of government, complete with two branches of legislature, was supposed to prevent a tyranny of the majority from ever appearing.

 

Or at least, as Madison put it, such factors would “make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens”. …..

The concept of a majority living off a minority, almost naturally, has resurfaced that old quote, an election year chestnut, attributed to Alexander Tytler. Here's what I wrote on the quote a few years ago.

The “New Populism” Makes A Manufactured Quote Very Apt And Timely – On this day back in 2003, we pondered a fascinating quote. It was said to be from a book titled “The Decline and Fall of the Athenian Republic” by a professor of history at Edinburgh University. His name was said to be Alexander Fraser Tytler. Most fascinating (to me) was that the book was said to have been published in 1776 just as the American Republic was being born.

 

Here is the quote:

 

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising them the most benefits from the public treasury, with the result that a democracy always collapses over a loss of fiscal responsibility, always followed by a dictatorship. The average of the world's great civilizations before they decline has been 200 years. These nations have progressed in this sequence: From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to  apathy; from apathy to dependency; from dependency back again to bondage."

 

Our research suggests that the quote was “manufactured” at a far more recent date. Nonetheless, the quote seems especially appropriate in today’s political atmosphere. Let us hope its conclusion does not turn out to be appropriate.

We expect that you, and we, shall hear more and more of Tytler and, hopefully, Madison, as our politicians toy with making this a class warfare election. God save the Republic!

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Tue, 08/21/2012 - 09:19 | 2723345 francis_sawyer
francis_sawyer's picture

Obama will pay for my gas & mortgage...

Tue, 08/21/2012 - 09:25 | 2723357 GetZeeGold
GetZeeGold's picture

 

 

In other news.......GM is set to announce they will accept SNAP cards.

 

Everyone has the right to go the the store to buy their food in style. Seven out of ten GM cars are made outside the US....so you know they're high quality!

 

 

Tue, 08/21/2012 - 09:27 | 2723373 francis_sawyer
francis_sawyer's picture

You might have just stumbled on a brilliant new idea...

"Reward Points" for your EBT purchases ("x" amount of bonus points buys you a brand new Chevy Volt ~ complete with weenies & marshmallows)...

Tue, 08/21/2012 - 09:29 | 2723377 malikai
malikai's picture

Will Obama pay for my Hookers and Blow? I want to vote democrat, but I'm just not sure yet..

Tue, 08/21/2012 - 09:36 | 2723388 francis_sawyer
francis_sawyer's picture

Go for it... Don't miss out on the gravy train this time around...

~~~

http://www.youtube.com/watch?v=KUDpc04r_QM

Tue, 08/21/2012 - 09:39 | 2723408 Dalago
Dalago's picture

USSA bitchezzzzz!

 

A government big enough to give you everything you want is a government big enough to take from you everything you have.”  - Gerald R. Ford; Address to a Joint Session of Congress. August 12, 1974

Domari Nolo

Tue, 08/21/2012 - 09:44 | 2723434 old naughty
old naughty's picture

No need to convince us that more printing is necessary.

Tue, 08/21/2012 - 09:44 | 2723438 Stackers
Stackers's picture

Sorry Art, the Republic has been dead and buried for a long time already.

Tue, 08/21/2012 - 11:36 | 2723921 Oldrepublic
Oldrepublic's picture

USA  rest in peace

Requiescat in pace

Tue, 08/21/2012 - 12:32 | 2724137 caconhma
caconhma's picture

In America, we should not worry about a democracy anymore. It is a history.

We are rapidly moving in a direction of Greece.

PS

76% of Greeks like to immigrate. Where will Americans move to?

As a former Soviet citizen I like to tell you that neither state-controlled propaganda nor mental institutions to treat dissidents did not work. The USSR just collapsed. One should not expect different results trying to do the same thing again and again and again...

 

Tue, 08/21/2012 - 15:05 | 2724868 AGuy
AGuy's picture

"Where will Americans move to? As a former Soviet citizen I like to tell you that neither state-controlled propaganda nor mental institutions to treat dissidents did not work. The USSR just collapsed."

You've answered your own question. The US will collapse and break up just like the Soviet Union. Americans will migrate to the new nations that made up the US, just like people did after the SU collapse. Perhaps with the exception of the Southern nations (formed out o the former) SU, most of the people have better opportunities and a recovered standard of living.

 

Tue, 08/21/2012 - 09:56 | 2723501 SWRichmond
SWRichmond's picture

Chesterfield  County PD, the FBI and members of the other sunglasses-wearing federal security forces are on their way to Art's house right now to interview him and take him to a psych ward for "evaluation."

Tue, 08/21/2012 - 10:12 | 2723580 sumo
sumo's picture

The psych ward is in an underground basement somewhere in Morocco. They have experts there for "evaluating" and "taking care of" difficult people. Don't worry Art, CIA will have an officer recording everything, for training purposes.

Tue, 08/21/2012 - 10:50 | 2723781 Alea Iactaest
Alea Iactaest's picture

I hope they don't check his hard drive...

Tue, 08/21/2012 - 11:10 | 2723862 Dr. Richard Head
Dr. Richard Head's picture

So who are the 750 Million rounds of hollow point bullets for?  The dependents or the cash cows for taxation? http://lewrockwell.com/spl4/who-will-govt-shoot.html

Tue, 08/21/2012 - 12:37 | 2724157 eatthebanksters
eatthebanksters's picture

Operation Prarie Fire...dissenters in the NWO...

Tue, 08/21/2012 - 09:42 | 2723429 HurricaneSeason
HurricaneSeason's picture

Heroin from Aghanistan is included.  Hookers are for the Secret Service and military.  You should vote republican.

Tue, 08/21/2012 - 10:00 | 2723522 JPM Hater001
JPM Hater001's picture

No, the lesson here is that he should join the secret service.

Tue, 08/21/2012 - 09:44 | 2723432 Sudden Debt
Sudden Debt's picture

As long as it aren't Azian hookers and that your blow comes from US government sponsored Colombian plantations it's okay...

you know... BUY AMERICAN!

Tue, 08/21/2012 - 10:41 | 2723739 HurricaneSeason
HurricaneSeason's picture

It's the blow that comes from the Columbian plantation.

 

http://www.reuters.com/article/2012/08/21/us-fl-asian hookers demand affirmative action rights-idUSBRE87K0J120120821

 

 

Tue, 08/21/2012 - 16:57 | 2725289 monad
monad's picture

Fuck 'em. 

Tue, 08/21/2012 - 10:15 | 2723594 Will To Live
Will To Live's picture

You will then be on our Representatives Plan.

Tue, 08/21/2012 - 09:34 | 2723401 Tippoo Sultan
Tippoo Sultan's picture

It would be interesting to compare ( by percentage ) the level of public dependency in the EU member nations, to the above-captioned level of dependency in the United States. It would not be at all surprising to find America is the most "dependent" of Western states.

Tue, 08/21/2012 - 09:47 | 2723454 HurricaneSeason
HurricaneSeason's picture

No, in Europe you retire at 42 after not paying any taxes and getting 3 months vacation a year and free medical for everybody and the top earners pay 75% tax.

Tue, 08/21/2012 - 10:30 | 2723689 MachoMan
MachoMan's picture

then you get americans to bail you out via currency swaps, interconnected guarantees, et al.

Tue, 08/21/2012 - 11:26 | 2723903 Oldrepublic
Oldrepublic's picture

Outside the states I have never met an American tourist getting unemployment insurance or welfare, quite common to find Europeans

on welfare, unemployment , etc ,traveling as tourists in various Asian countries

Tue, 08/21/2012 - 13:17 | 2724343 the tower
the tower's picture

Bullshit. You obviously know nothing about Europe, you're only confirming American ignorance.

Tue, 09/18/2012 - 11:15 | 2807022 Cursive
Cursive's picture

@HurricaneSeason

re: taxes

Not that I disagree with the main thrust of the post (that the USSA is a welfare state is well-known), but federal income taxes are irrelevant for the working and middle classes.  The payroll taxes are how money is collected from the lowest of the low (assuming one works).  This has also given rise to a great black market for menial labor jobs.

Tue, 08/21/2012 - 09:48 | 2723458 Sauk Leader
Sauk Leader's picture

Whats in your wallet.

Tue, 08/21/2012 - 09:25 | 2723367 stocktivity
stocktivity's picture

Silver is heading higher again this morning.

Tue, 08/21/2012 - 09:44 | 2723435 Dr. Richard Head
Dr. Richard Head's picture

See?  Some of us are actually in the courage stage.  Unfortunately, many are still in bondage.  It would be foolish to believe that we are currently not under a tyranical state overall.

Tue, 08/21/2012 - 09:44 | 2723436 Dr. Richard Head
Dr. Richard Head's picture

See?  Some of us are actually in the courage stage.  Unfortunately, many are still in bondage.  It would be foolish to believe that we are currently not under a tyranical state overall.

Tue, 08/21/2012 - 09:37 | 2723412 IndicaTive
IndicaTive's picture

Truly a benevolent dictator....mmm...mmm...mmm

Tue, 08/21/2012 - 09:47 | 2723456 slaughterer
slaughterer's picture

Shorting AAPL as of right now at 673.  Duration of trade 2-minutes to 4-days.  LOL.

Tue, 08/21/2012 - 09:56 | 2723499 Red Heeler
Red Heeler's picture

"Obama will pay for my gas & mortgage..."

http://www.youtube.com/watch?v=P36x8rTb3jI&feature=related

Tue, 08/21/2012 - 10:01 | 2723523 bnbdnb
bnbdnb's picture

Vote liberal democrat. Lets expedite this madness.

Tue, 08/21/2012 - 11:12 | 2723866 Dr. Richard Head
Dr. Richard Head's picture

I'm confused now.  So Romeny right?  No wait Obama?  Shit.  I will stay home.

 

Tue, 08/21/2012 - 11:42 | 2723968 bnbdnb
bnbdnb's picture

Yeah Obama = Romney. Not in Congress though. Vote liberal spend heavy everywhere.

Tue, 08/21/2012 - 10:09 | 2723570 Ying-Yang
Ying-Yang's picture

And Titty Bars funded by Snatch Cards!

Tue, 08/21/2012 - 10:34 | 2723707 DCFusor
DCFusor's picture

Once the plebes discover they can vote bread and circuses for themselves on the government dole, it's essentially over for your society.

Robert Heinlein, "Time enough for love"

Tue, 08/21/2012 - 11:04 | 2723833 johnQpublic
johnQpublic's picture

Obammy would like to sell you some hunger insurance. Are you insured against hunger? Perhaps you should be! Without this coverage, you may find it impossible to continue to afford feeding yourself and your family. With this coverage, not only will you be assured of continuing to get at least some food, but so will I. In fact, thanks to this plan, I will get to eat very, very well indeed.


Here's how it works. You buy a hunger insurance plan from my hunger insurance company, or from one of my illustrious competitors in the hunger insurance industry. The hunger insurance market is very competitive, offering you plenty of consumer choice. You can even decide to go with a hunger maintenance organization (HMO); that would make a lot of sense if you are on a diet.

Whichever company you choose buys up food in bulk on your behalf. Then, should you come down with a case of hunger, you can file a claim, pay the copayment, and get some of the food. Certain feeding procedures, such as breakfast, are considered elective, and are not covered.

Tue, 08/21/2012 - 11:43 | 2723974 mrdenis
mrdenis's picture

You didn't buy that gas ..someone else bought it for you ......

Tue, 08/21/2012 - 11:53 | 2724005 xamax
xamax's picture

Correct....
Now I ask myself what the State can do for me and certainly not what I can do for the State. Thats what all these idiots of central bankers have achieved, at least with me.

Tue, 08/21/2012 - 13:10 | 2724305 SanOvaBeach
SanOvaBeach's picture

Were do I apply?  REALLY>>>>>>>>>

Tue, 08/21/2012 - 19:16 | 2725629 Cloud9.5
Cloud9.5's picture

Francis my friend, you are of the wrong class.

Tue, 08/21/2012 - 20:38 | 2725830 monad
monad's picture

Obama will make you pay for my gas & mortgage. Obama will make you pay for my wife's boob job. Its needs based, her shrink says she has low self esteem. Obama will make you pay for my ugly kid's braces, and therapy and education. Obama will make you pay for rounds of 40's for congress & his homeys, and every lateeno in the world is standing in line expecting Santa to give them a white woman, like Romney has already promised. Including the faggots, who plan to sell them.
Brother, you asked for it.

Tue, 08/21/2012 - 09:20 | 2723346 Shizzmoney
Shizzmoney's picture

The simple story is that we need a new source of demand to fill the gap left by the collapse of the housing bubble. In the short term that can only be the government. In the longer term it will have to be trade, which means a reduction in the trade deficit. That means first and foremost getting the value of the dollar down, but macho politicians in Washington don't talk about a lower valued dollar. The folks on Wall Street don't like it.

http://www.cepr.net/index.php/blogs/beat-the-press/still-getting-the-hou...

Tue, 08/21/2012 - 09:36 | 2723405 Hero Protagonist
Hero Protagonist's picture

Not a snark here...

That means first and foremost getting the value of the dollar down

In your scenario, who is responsible for "getting the value of the dollar down"?

Tue, 08/21/2012 - 09:22 | 2723356 centerline
centerline's picture

Is tyranny next?

Yes.  Duh.

Tue, 08/21/2012 - 09:24 | 2723358 monad
monad's picture

The history of the USA since 1913 parallels the events surrounding the implantation of the Scots into Ireland. I suggest you study what they did to Belfast in the 60s & 70s; its whats next, with computers.

Soon.

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