The Second American Civil War

By: Carlo Barbieri

America is facing a second Civil War of true and potentially bloody proportion. Many people may not be aware of this, for no shots have been fired and uniformed troops are nowhere to be seen, as traditional wartime rules normally dictate.

This nation is divided ideologically, in a truly radical way, as it was before the first Civil War.

The base of the “War Between the States” fought in the 1860s rested on economic factors, among others reasons. The farm states of the South feared that Abraham Lincoln’s election would bring an end to the free use of slaves.

In the current case, there are several reasons for this fierce battle between the contenders. States are not divided, but sectors of the population are. In particular, the middle class, which is being suffocated by the super rich, harshly taxed and pushed toward non-existence.

For reasons I will detail later, the American middle class, caught between the housing bust and recession, lost $25 trillion in the last decade, a period which became known as “the lost decade.” This means that every American, including newborn children, lost $85,000 during this period.

If we look at certain population groups such as the so-called “baby boomers,” they alone lost 25 percent of their resources or “wealth.”

These losses not only drained savings and earnings, but they were also reflected in increased costs. Health insurance soared by about 69 percent from 2000 to 2010. And after the proposed change in law signed by the current president to “give health care to everyone,” prices have already risen more than one-third and the services covered by them have decreased substantially.

With the collapse of public education, fired by teachers’ unions that do not admit improvements are needed in the system, the cost parents pay for private education has nearly doubled.

On the other hand, food prices have also increased exponentially – particularly in the production of corn which is being tapped as part of the environmental “green wave” to be rendered into ethanol to fuel vehicles.

With the limitations imposed by the “environmentalists,” oil exploration and refining on American soil has been cut back. As a result, the price of fuel has more than tripled in the last 10 years.

Economists at Goldman Sachs parody the Great Depression by calling this phase, “The Great Stagnation,” and a well-known billionaire, assuming the nation has already lost its battle to grow the financial numbers, refers to this situation as “the new normal,” that is, a new phase “normal” economy where more joblessness and less production are the rule.

The dollar has lost 82 percent of its value since the United States abandoned the gold standard in 1971, and of this, 35 percent has occurred since 2002.

Since the eighties, the productivity of the country has dropped, with jobs going overseas and workers flocking to unemployment lines.  With this financial flutter, the 1 percent of people who make up the richest members of the population keep about 90 percent of the new wealth generated. This new Wall Street cash remains in the clutches of the Wall Street insiders and does not end up in the earnings or investments of members of the middle class and retirees.

The debt of Americans has increased from 2 percent of their earnings in 1982 to almost 100 percent at the end of the last decade, while the average savings declined from 12 percent to about 1 percent during the same period.

Government employees earn, on average, 33 percent more than private sector workers and have health insurance that’s 17 percent better. Yet 12 percent pay less for it and retire in a shorter time.

At the same time, government seizes control of the states by providing subsidies for those in need: tickets to purchase gasoline, food stamps, rent assistance, aid for health care and telephone bills, housing for single mothers and subsidized transportation.  This assistance reaches tens of millions of people who do not work, but feel they are entitled to public benefits paid for with money that comes from those who are employed.

What is the reading that you can give these data?

• The Americans won the battle over communism, but lost to socialism.

• The middle class, which has always been the major factor of progress and political stability, lost its place in political decisions and their share in national wealth.

• The state is wasting money and productivity by paying salaries to people who have public sector jobs, but do no actual work.

• The American has turned away from its ideal, which had generated its golden age, to engage in consumer spending based not on wealth, but on debt.

• The American liberal political and economic decisions distributing the wealth have created a false sense that all is well with the American people.  But by becoming more dependent on the government, they have, in simple words, sold the dinner to get a hearty breakfast.

• Spending on foreign wars, questionable objectives and internal expenses increased populist spending and debt to unsustainable proportions.

And with this, we have the real reasons for a second civil war in this country.

This is fratricidal civil war that forces brother to confront brother. It is not just a battle between Democrats and Republicans, but fights within the parties themselves. As a result, the radicals gain notoriety and notice.

The “troops” are not standardized, and most have the sense that the error is large and needs to be fixed. But they cannot identify its origin and its solution even less. We still have skirmishes in all parts of the nation and a very blurred vision of the future.

But civil war is there, and more and more parts will be coming together. Surely, this year’s election should bring more light to this battle, where we have wasteful conservatives on one side and wild spenders on the other.

The war is getting clearer contours through debates among the GOP candidates, who have no ideological unity, which has made a liberal party of libertines.

The question is not only to know which side will win this war, but also what the breadth of the economy must be to withstand the burden of fighting and insecurity brought on by its more direct consequences.