Will the United States be an Entitlement Society or an Opportunity Society? It’s not a new question. It’s roughly the same question Americans have been asked for decades.
Let’s begin with definitions:
OPPORTUNITY: a favorable juncture of circumstances; a good chance for advancement or progress.
ENTITLEMENT: the condition of having a right to have, do, or get something; the feeling or belief that you deserve to be given something (such as special privileges); a type of financial help provided by the government for members of a particular group.
What made America great? There are many factors to our greatness, but no one can deny the driving force of our greatness is the slogan: “America, the Land of Opportunity!” I mean, think about it, why do millions of people from other countries around the world risk everything, even their lives to get to America? Opportunity!
Since the Depression, Americans have generally had to choose between a political leader whose goal was to expand government (Entitlement), or one who wants to strengthen the private sector (Opportunity).
In an Entitlement Society, the government plays the role of a policeman who uses his power to ensure economic equality.Think of the policies during the 1930’s that prolonged rather than ended the Depression. Think of the War on Poverty, which never halted the poverty cycle. Think of the current president’s campaign theme about fairness, which he’s called “the defining issue of our time.”
An Entitlement Society requires wealth distribution — which requires government force. While hailed on the left as a panacea, a remedy for all difficulties, redistribution is a drain on an economy because it weakens a society’s motivation to work, invest and innovate. It moves capital from the private sector, where it would otherwise stimulate economic expansion, to the public sector, where money is spent so inefficiently that government spending is actually a drag on growth.
If a recent Gallup poll is to be believed, Americans aren’t that interested in reducing “the income and wealth gap between rich and poor.” Only 46% say that it’s “extremely” or “very” important that government should follow an equality agenda. At the same time, 82% say economic growth is either “extremely” or “very” important. More than half (52%) say that a wealth gap is an “acceptable part” of the economic system. Only 45% say it isn’t.
The growth that has created Western prosperity, the growth that 82% say is “extremely” or “very” important, is available nowhere else but in an Opportunity Society.
Only in open economies do shop owners, managers, workers and entrepreneurs have the incentive to create more wealth. On the other side is the Entitlement Society, in which the state guarantees that some or all of that wealth is divided among others who are considered more “entitled” to the wealth than the creators. In an Opportunity Society, however, creators keep what they produce, which is an incentive to produce more.
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Today, America’s economic system is mixed. It’s neither a full Entitlement Society nor a complete Opportunity Society. But we’ve moved hard toward a predominantly Entitlement Society — and ignored constitutional limits in doing so — where the special interests that have captured the government are the beneficiaries at the expense of the productive.
This is unsustainable. Greece, where the entitlement mentality has caused a fiscal collapse of the government and an economic breakdown, proves that handouts and state expansion can’t go on forever. Sweden, thought of by many on the left as having the right mix of welfare-state socialism and capitalism, saw this problem coming to its country years ago and quietly reversed its path.
Will America be smart enough to make the same adjustment?