Why Is There No Socialism In America?

Opinion

 
on May 01 2012 4:50 PM
US president Barack Obama
US president Barack Obama Reuters

At the turn of the 20th century, German sociologist Werner Sombart asked:  Why is there no socialism in the United States?  This question became the bane of socialist theorists who were left dumbfounded by the overwhelmingly capitalist disposition of Americans.

I believe the answer is simple: There is no socialism in America because the American dream -- the idea that every man can succeed when left to his own accord -- has been ingrained in our country's psyche since its very inception.  It is an attitude and outlook that has been safeguarded from the beginning, one that has only been maintained through constant vigilance... until now.

Through an explosion of federal spending, encroachment on the private sector and expansion of the public sector, President Barack Obama is threatening our the laissez-faire capitalist system so many have attempted to emulate, which leaves me dumbfounded.

Economic Freedom Score

Each year, The Heritage Foundation and The Wall Street Journal produce the Index of Economic Freedom.  They measure 10 freedoms and average those into one overall economic freedom score 1-100, 100 signifying the most free.  Observing the change in America's economic freedom from 2008 to 2012 is quite telling.

In the last year of the Bush administration, the United States was ranked as the world's 5th freest economy.  It received a score of 80.6 and was given the designation free.  In less than four years, the United States has dropped to 10th freest, obtaining a score of 76.3, and falling to the category mostly free.

The staggering drop in America's overall economic freedom should come as no surprise.

Regulations, Federal Spending and Taxation

First, there have been unprecedented levels of federal spending accompanied by a transfer of wealth from citizens to the government.

According to the U.S. Treasury, in eight years of the Bush administration, the debt increased $4.9 trillion -- undoubtedly a significant increase.  However, in less than four years of the Obama administration, debt increased by what Bush amassed in eight years -- $4.9 trillion.  At this pace, if Obama gets a second term, his increase in debt will more than double that of Bush's.

How has Obama attempted to ameliorate his skyrocketing debt? Not through cutting spending, but raising taxes.  Each of his budgets proposes giant tax hikes.  His 2012 budget proposal alone contained 43 tax hikes amounting to $1.5 trillion in new taxes over the next decade.

On top of the overwhelming tax burden, job creators are set to experience a regulatory burden on business [that] continues to increase rapidly, and heightened uncertainty [which] further increases regulations' negative impact, the Index of Freedom report noted.  Business is hamstrung and, along with it, our economy.

Expansion of the Welfare State

Second, as the private sector contracts through this transfer of wealth, the public sector expands.

According to The Heritage Foundation, Obama proposed to increase welfare spending 42 percent since Bush's last budget in 2008.  Perhaps most telling is that 47 percent of Americans now receive one or more federal benefit payments, the highest ever recorded in American history.

Some would say this is a result of economic hardship -- welfare payments are up along with the unemployment rate.  Even so, if Obama was concerned with reducing the welfare state rather than expanding it, he would have embraced something along the lines of H.R. 1167, the Welfare Reform Act of 2011, which pledged to cap welfare spending at 2007 levels once the unemployment rate hits 6.5 percent.

Instead of promising to reduce the welfare state, Obama seeks to expand it through the invasive vehicle of Obamacare.  By 2014, the federal government must develop two national health insurance plans through the Office of Personnel Management, or OPM.  The OPM plans will compete with private plans in health insurance exchanges and will have standards separate from those of the private sector, thereby giving them an unfair advantage.

Robert E. Moffit of the Heritage Foundation noted that proponents of the public option view it as an ideal vehicle to undercut private health plans and ensure a rapid evolution toward a single-payer system.  Once again, the public sector grows.

Taken together, it is no wonder the United States is plummeting in the Index of Economic Freedom.  As Europe flees from social democracy and its ailments, America runs towards it at full speed.

Though we certainly have not reached the point of socialism or even social democracy, I cannot help but wonder if Werner Sombart would so readily ask about the absence of socialism in America today.

Kayleigh McEnany is a writer and political activist who graduated from the Georgetown University School of Foreign Service and studied at Oxford University.  She is the founder of www.RealReaganConservative.com. She writes every Tuesday for the International Business Times.  

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