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Puzzling contradiction in the American Way

Updated: May 3, 2013 12:14PM

What happened to all the American flags that waved on cars and buildings after Sept. 11, 2001? Maybe they grew tattered and were given a proper burial. Many will be pulled out of storage for this July 4 holiday weekend. How quickly we've moved from flag waving to a national political debate on flag burning.

Our national unity around the flag and the free enterprise system -- which were both targeted by terrorists -- seems slightly frayed as well these days. Perhaps a long holiday weekend is just the time we need to get over our cynicism about the bountiful country we live in and the economic system that provides that bounty.

It's easy to be disillusioned by some of the economic contradictions in our society, most revolving around government's role. Perhaps it's inherent in the democratic system that we elect politicians who expect gratitude for rewarding us with our own money.

Fulfilling the promises

We've learned that it takes a growing economy to fulfill those government promises. A growing economy creates jobs. And jobs lift people out of poverty. The word "welfare" has largely disappeared from political discourse.

We've learned that we must let go of the past economy, and develop the future. And we've learned that the process is both painful and necessary. There are always contradictions. We've seen that cutting taxes can actually increase government revenues, and we've been painfully reminded that both political parties can find ways to spend all that extra revenue -- and more.

It's easy to wonder cynically about some of the contradictions in our society and our economy. For example, did you ever wonder:

*Why we're spending billions of taxpayers dollars to fight a war in Iraq and rebuild their county, when they have all that valuable oil?

*Why the government spends money telling kids not to smoke, but states have become so dependent on the revenue from the "profit-sharing" legal settlements with cigarette makers that many states have even issued bonds to be repaid with those projected future nicotine revenues?

*Why state and multistate lotteries proclaim that their share of the huge lottery pools go to fund education, but education funding per capita on a state basis has hardly increased at all?

*Or why so many multi- million-dollar lottery winners wind up broke within a decade, providing sob stories for magazines?

*Why the huge surpluses that were generated by the 1983 Social Security tax increase won't be there for boomers' retirement? (I know the answer to this one: A few years after the tax increase, the "surpluses" in the "trust fund" were combined with the overall federal budget, which will still run a $300 billion deficit this year.)

*Why politicians spend literally millions of dollars campaigning for a job in the U.S. Congress that pays only $165,200? Or why only school children and Congress get "recess?"

*Why the government is demanding essentially life sentences for white-collar criminals such as Ebbers and Rigas and Lay, but some murders and most rapists get out after less than eight years?

I really spend a lot of time wondering how the millions of baby boomers who haven't saved any money for "retirement" will manage if they live into their 90s -- as looks increasingly likely. I wonder if our children will ante up for their parents' retirement, just as they're trying to save for their own.

If you spend a lot of time wondering about these economic contradictions and problems in our society, it can really get you down. Instead, it's time to focus on an economy so great that it can actually overcome all those drawbacks, and turn in broad economic growth, low unemployment and more widely distributed prosperity than any other society in history.

A headline to make you smile

And if you're still unhappy over our nation's failures to live up to our highest expectations, one headline should make you smile.

When you see Warren Buffet giving billions to Bill Gates' foundation -- designed to help fix problems in America and around the world -- then you know there's no reason to be cynical. Our wonderful free-enterprise system that creates such amazing opportunity also creates people who know how to give back to the world.

That's an uplifting thought for the Fourth of July. And that's The Savage Truth

Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.

Copyright © Terry Savage Productions

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