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Cuba, Statists, and Americas Economic Woes


The economic situation in Cuba goes a long way in explaining the economic woes of the American people as well as the response of American statists to such economic woes.

After Fidel Castro took power in 1959, his mindset was no different from the average American statist. Castro believed that the reason that most Cubans were poor was because so many Cubans were rich. The secret to making poor people wealthy, Castro thought, was to take the wealth and income of the rich and redistribute it to the poor.

That’s precisely what American statists believe. That’s why they’re always obsessed with raising taxes on the rich and giving the money to the poor. Like Castro, they honestly believe that by taxing the rich and distributing the money to the poor, America’s decades-long war on poverty will finally be won.

That was the idea of the welfare-state way of life that President Franklin Roosevelt foisted onto the American people during the 1930s. The primary purpose of the federal government became taking money from those who had it and giving it to those who supposedly needed it more. That was when the crown jewel of the welfare state — Social Security — got enacted.

Ever since, the welfare state has gotten larger and larger, along with the size of the federal government. Throughout the process, federal spending has soared, along with ever-rising taxes and debt needed to fund the welfare-state (and warfare-state) programs.

As the borrowing and the debt grew, the Federal Reserve came to the rescue, enabling federal politicians to avoid raising income taxes so high as to incur the ire of the taxpayers. The Fed simply printed the money needed to pay the ever-burgeoning debt and other excess expenses. That’s why the value of the dollar has continually plummeted since the 1930s.

Fidel Castro simply carried Roosevelt’s statist vision to its logical conclusion. What Castro did was take everything from the rich, not just a portion of their income and savings. He nationalized homes and businesses, redistributing housing to the poor and having the government run the businesses. Most everyone became an employee of the state — a guaranteed job. It was the role of government to take care of everyone, the dream of statists everywhere.

For decades, Cuba has been mired in economic despair, with people verging on starvation. Why? American statists would tell you it’s because of the 2 percent or so of the market that is still not under the Cuban government’s control. If only the government were able to gain control over that last 2 percent, American statists would say, economic prosperity would finally come to Cuba.

How do we know that American statists would say that? Because that’s what they say about America’s economic woes. Statists refuse to acknowledge that the root cause of America’s economic woes is the welfare-state (and warfare-state) way of life that FDR imported to America. The spending, the borrowing, the debt, the inflation. Instead, statists say, it’s all because of that part of people’s lives that is still not controlled or owned by the federal government.

Thus, statists blame America’s economic woes on the rich, greed, free markets, self-interest, or other such nonsense. Anything to avoid acknowledging that the welfare-state way of life has been one miserable and destructive failure.

Several months ago, the Cuban regime announced that it was going to lay off 500,000 federal employees. What would American statists say about that? They would say that that was the worst thing that Cuba could do. Laying off so many workers would interfere with the recovery. It would mean no more federal spending for salaries for those half-a-million people. It would mean that all those people wouldn’t be going to the mall, if Cuba had malls, to spend their money.

Isn’t that what American statists say about federal spending here in the United States? Wasn’t that their reaction to the possibility of a so-called shutdown of the federal government? Isn’t that the reason they give for advocating one more lifting of the debt ceiling rather than slashing welfare-state (and warfare-state) spending?

Cuba is the end of the road for the statist vision. That’s where American statists are bound and determined to take our country with their welfare-warfare state way of life, together with the soaring spending, debt, taxes, and inflation that come with it. One can only wonder why the American people continue to permit them to do so.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.