By Mark W. Fowler

“Go to the ant, lazy one, observe its ways and be wise.” —Proverbs 6:6 (NASB)

One of Aesop’s fables, “The Ant and the Grasshopper,” tells the story of a group of ants tending to corn that had become damp in the rain. A starving grasshopper appears begging for food. The ants ask rhetorically what the grasshopper had been doing all summer instead of gathering food. The grasshopper responds that he had been singing. The ants retort that nothing would be better than to spend the winter dancing.

Aesop lived in a time of scarcity, when food could not be purchased at a big-box store. Failure to attend to the necessities of life could be calamitous.

In that posture, this is admonition to industry. Hard work, thrift, and cooperation are values to be embraced. The ants were cooperating with each other to dry the corn and provide for themselves. The grasshopper neither cooperated nor planned ahead.

Enter modern politics, stage left. Ronald Reagan said some of the most feared words in the English language were “I’m from the government and I’m here to help.” The problem with governments — or, more correctly, politicians — is that they are experts in protecting their self-interest, not yours. The next problem with governmental action, as Frederic Bastiat observed, is that “Almost always, the immediate consequence is favorable, the ultimate consequences are fatal.”

Let us look at three examples.

Federal government debt is now over $34 trillion and the annual interest on that debt is $659 billion, up 39% from 2020 because politicians think it’s better to throw money at every issue in order to garner votes. As a consequence of this spending, we have inflation seriously devaluing the dollar. A watch you could have bought for $100 in 1973 now costs $706. Inflation is a hidden tax on everything, affecting everyone. Systematic inflation of this type is always and everywhere due to government spending in excess of revenue. Even though revenue to the federal government increases every year, spending by the government outpaces revenue increases. This is unsustainable.

Two-thirds of the federal budget is entitlement spending, such as Medicare, Medicaid, Social Security, and disability insurance. These programs were enacted to protect the elderly and vulnerable from the ravages of poverty. In 1935, with the creation of Social Security, there were over 150 payees to every beneficiary. Now there are two due to the aging population. The Social Security fund is expected to run out in 2035. No politicians are talking about this. Unless restructured, benefits will have to be cut, and this will be devastating to the 40% of American seniors whose sole source of support is Social Security.

The federal government tries to control inflation by increasing interest rates, which directly affects the cost of financing. In 2019, mortgage rates were 3.9%. A 30-year mortgage for $320,000 meant a monthly payment of $1,509 and total loan repayments of $543,000. Today, mortgage rates are 6.9% and the monthly payment would be $2,108, with a total repayment of $758,000. Home buying for many will be out of reach until interest rates come down.

There is no free lunch, as Milton Friedman said. Government has no money of its own. All money “from the government” comes from someone else or from printing it. Forty percent of Americans rely on Social Security for retirement income. Without it, they would be in poverty. But entitlement spending must eventually be cut or taxes raised. It is inevitable.

On the other hand, by saving about $300 monthly at 4% annual interest rate over 30 years, an individual would have roughly $500,000. Obviously, this is ambitious, but any amount is better than nothing. Here is a message the government should broadcast.

Thrift in favor of retirement savings is empowering, ennobling, and liberating. It is also necessary. There is not enough money for everyone to rely on the government. Singing all summer is altogether different from dancing in the winter. Follow the ant’s example.

Mark W. Fowler is a board-certified physician and former attorney. He can be reached at [email protected].