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

Tyler Durden's picture

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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buzzsaw99's picture

fuk forbes and the high horse he rode in on

ArrestBobRubin's picture

Own silver and gold and limit the risk of dependency

Le Metropole Members,

After much aggravation of late, BOTH gold and silver have
taken out their key resistance points of $1630 and $29
respectively. The bases formed over the past many months
are powerful ones and can support moves to much higher

Thus far the info provided to me by my three sources
about an August precious metals breakout, which will lead
to all-time high prices for gold and silver, is on target.

In addition, it will be helpful to know that it is only
a matter of time before the problem JP Morgan has with
their massive silver short position goes VIRAL! Think
Libor scandal type thing!

All the best,

Bill Murphy
Le Patron

Abitdodgie's picture

Why do people keep quoting fundementals about gold and silver the market, it is pure control and gold and silver will go to what TPTP want it at period, also if i read another writing on how gold/silver are going to go crazy, when it has gone down in value since sept 2011, dont get me wrong i have gold/silver ,but please all your gold/silver price are belong to them.

Cognitive Dissonance's picture

Everyone seems to be ready for "the collapse". My question is simple.

What happens after the collapse?

centerline's picture

That's where the tyranny part kicks in!

Incubus's picture

tranny party?  Sounds fun.

sdmjake's picture

"The pain of war,

 cannot exceed,

 the woe of aftermath"

-LedZeppelin [battleofevermore]

Abitdodgie's picture

War , I fart in its general direction , so 5 to10 million people die , try disarming a nation then we will see some real numbers  262 million killed by tyranical Governments  this centery alone. Disarmerment is Genocide

malikai's picture

No, everyone *here* seems to be ready.

Our local sheeple are most certainly are not ready.

Cognitive Dissonance's picture

In the minds of many people "ready" is a relative term. Many so called "sheeple" are beginning to see, or at least strongly sense, that the wolf circles the flock. Since they are locked into their present reality or they simply live paycheck to paycheck, this growing awareness constitutes "ready" in their minds.

Dependency often creates closed minds and a belief that there are no options.

francis_sawyer's picture

 "In the minds of many people "ready" is a relative term."


EXACTLY!... Every time I buy a box of ammo... the DHS turns around and buys another billion hollowpoints... It's like playing Monopoly & the only property you own is Mediterranean & your opponent has monopolies on all the rest of the board (with hotels on them)...

Totentänzerlied's picture

Have you heard the news?
The dogs are dead!

You better stay home
And do as you're told
Get out of the road

if you want to grow old.


Not no options, no good options.

alien-IQ's picture

Wall Street becomes eligible for full time Military protection?

Juan Wild's picture

it always has had full-time military protection, but now you will actually "see" the tanks. like that zappa quote....

"The illusion of freedom [in America] will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater."

Dr. Richard Head's picture

Most of us here have already peaked behind that curtain. 

Juan Wild's picture

yes, and its so disheartening when we go forth into our daily routines and see how asleep people are. quite sad. and lonely. but you know, lonesome are the brave!

Dr. Richard Head's picture

I find my daily routine revolves less and less of a routine to the daily grind and more time staring into the abyss. 

ONO47's picture

Dude, cheer up. Being disheartened isn't going to help. You need to be a happy warrior. We have challenges, oppurtunities and a lot of work ahead.

Abitdodgie's picture

There is lots of money to be made from war , let the stupid ones go and fight it and you make the money, dont worry be happy.

alien-IQ's picture

I've always loved that Zappa quote. Spot on.

Zwelgje's picture

Zappa was beyond

NEOSERF's picture

The collapse has already happened and you are witnessing the aftermath...a handout nation, SNAP explosion, and I'll bet that although 50.6% of voting age are on public assistance that if you did an exit poll of THOSE THAT VOTE, the % of those people is probably in the 65% territory meaning that more dole is a foregone conclusion.  Less investment in meaningful companies (ie. not retail) that move this country forward will be curtailed as the nannystate enlarges.

d edwards's picture

On a long enough timeline, the survival rate for everyone drops to zero. ;-)

Juan Wild's picture

lol, who cares, right? watch the big game or Oprah and look! Good Morning America, CNN, everything is A-OK! ;)

its so easy to sleep
its so painful to wake up.

TSA gropee's picture

Indeed. It's the blue pill, red pill story. If one chooses the blue pill there is a cornucopia of pharmaceuticals to numb the senses and settle into a state of permanent normalcy bias bliss. Tempting for many...

Cognitive Dissonance's picture

Classic! Just a beautiful summary of a key Matrix scene.

"You know, I know this steak doesn't exist. I know that when I put it in my mouth, the Matrix is telling my brain that it is juicy and delicious. After nine years, you know what I realize?"

[Takes a bite of steak]

"Ignorance is bliss."

BLOTTO's picture

'If ignorance is bliss, then knock the smile of my face.'

If we don't take action now
We settle for nothing later
Settle for nothing now
And well settle for nothing later

~Settle for Nothing, RATM

-listen on volume 10+

Oldrepublic's picture


A World of Hillbilly Heroin: The Hollowing Out of America, Up Close and Personal

by Chris Hedges

BLOTTO's picture

Good Question CD...

Thats when i think we get duped, lied to, *hoodwinked* - yet again...

They bring in the remaining 'King' - our supposed 'new saviour'...which will NOT be our 'good' guy.

In fact, thats when the reall tyranny starts...

Out of Chaos...


And this order is not going to be fun...its going to be shit.

Cognitive Dissonance's picture

Essentially endless root canals without Novacaine.

<Dang.....Obamacare won't pay for it either.>

Cognitive Dissonance's picture

You're on FIRE today pods. :>)


[Finance, Insurance and Real Estate]

francis_the_wonder_hamster's picture

It took me a second, Pods.  That was a good catch.

monad's picture

I'm pretty sure Roger Clinton still delivers.

Stoploss's picture

It's been going on since before 3123BCE.

No different now.

BooMushroom's picture

You sure know how to make a guy take a bunch of reading detours before getting to the bottom of the comments section!


nevadan's picture

After the collapse?  Those who are able to stay alive and retain their holdings of precious metals will prosper.

web bot's picture

For a time.... barter economy... civil unrest... gov't (military) expropriating food producers and distribution companies...

There's a long list of events CD.

Cognitive Dissonance's picture

I agree.

Our best defense against the unknown and unknowable is an open and flexible mind. So often we are our own worst enemy because we refuse to let go of what was and not prepare for and deal with what is.....and what's coming. 

Zero Debt's picture

The collapse happens in stages.

First, the moral collapse from the credit driven greater fool economy where people try to fool each other rather than generating value added.

Then, the societal collapse from unemployment and inequality caused by the burst bubbles which allocates gains and losses without regards to individual merits.

Then, the material collapse from lack of sound investment and winding down of malinvestments, or the prolonging of the collapse by central planning.

Finally, the institutional collapse caused by the failure of government to postpone the inevitable day of reckoning.

Each phase requires different hedges, different focus points and different skills.

fuu's picture

We learn to forgive and forget? Someone around here wrote an article about that.

Cognitive Dissonance's picture

I seem to remember a foolish idealistic idiot posting some drivel along those lines last year.

He really should just get a life. :)

fuu's picture

I see I was feeling militant in that post.

Cognitive Dissonance's picture

We all have our days. Sometimes I go back and read the comments underneath my articles (where I feel true learning is acquired from the thoughts of others) and sometimes I can't help but laugh at my old posted comments.

It is sort of like looking at old photos of yourself. There are "I can't believe I wore those ugly clothes" moments galore.

TSA gropee's picture

I can relate. I generally come here for 3 reasons, not necessarily in order. To be entertained, to school, or be schooled. I find the latter to be where I am most often... =)

HurricaneSeason's picture

Whores and bandits.  Washington moves to New York City.  Marion Barry is in charge.