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Apr 27

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What makes us a great country?

What makes us a great country?   To many, this is not a hard question, perhaps even rhetorical.   Anyone that took U.S. history 101 can quickly think to our founders and the United States Declaration of Independence of 1776.   The text of the second section of the Declaration of Independence reads:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

So why are we talking about this seemingly rhetorical question?   During his recent budget speech at George Washington University, President Obama said that government entitlements made  America  a great country.  For exactly the same reason that President Obama made the statement, this has significant policy ramifications in any attempt to alter these entitlements.  If entitlements really have made our our country great, then they cannot and should not be changed,  In President Obama’s words:

There but for the grace of God go I,’ we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities.  We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.

I found this puzzling. What really fuels economic growth?   Some people think that our freedom, founding principles, and economic system might be more important to getting us where we are today than entitlement programs.   Perhaps the underlying efforts that allowed (i) assemblage of our current geographic borders, (ii) creation of a successful industrial and agricultural economy, (iii) creation of our legal and governance systems, and (iv) victories in our various military conflicts deserve greater attention than our entitlement programs.  If President Obama is right, the approximate 150 years that laid the foundations for our founding as a country – i.e., before President Roosevelt’s New Deal and President Lyndon Johnson’s Great Society – were just so-so years.  Is it correct that we became a great country only after the entitlement programs kicked in beginning in the 1930s, and then later in the 1960s when we had all four of them (Medicare, Medicaid, Social Security, and unemployment)?

Despite extensive studies in economics and history, maybe I am uninformed.  Maybe President Obama is right that entitlements made this a great country.  If President Obama is right, we will need to find something else to make us even greater still, so we have the resources to pay for these entitlements.  My training tells me that whatever allows us to have the power to pay for our decisions is what really makes us great.

About the author

Nicole Liska

I am a Principal at Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I hold an ABD and MA in economics from the University of California, San Diego. I perform damages analyses and serve as a damages expert witness. My resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2011/04/what-makes-us-a-great-country/

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