The Great Society and its Missing Premise

"Your imagination, your initiative, and your indignation will determine whether we build a society where progress is the servant of our needs, or a society where old values and new visions are buried under unbridled growth. For in your time we have the opportunity to move not only toward the rich society and the powerful society, but upward to the Great Society."

Lyndon Johnson, 1964

America came out of World War II with an economy on fire.  As the momentum started to fade Kennedy enacted a tax cut on the top marginal rate before his death in '63 which sent the GDP up over 10% in '64.  Johnson rode the wave of momentum and recreated his own version of Roosevelt's New Deal with a vision of ending poverty in the United States and he called it the Great Society.

Out of this vision came such programs as medicare, medicaid and food stamps.  He focused the spending on urban areas due to his belief that in 50 years 80% of Americas population would be centered in large cities.  He felt the people in these areas should have some control over the spending they were receiving so we saw the creation of Community Action Agencies.  There was a focus on education programs so we saw the Bilingual Education Act of 1968 which gave money to school systems to help them teach young children who could not speak English.

Other programs we have today that were created under this umbrella include, Public Broadcasting Service, Department of Transportation and the National Endowment of the Arts.

This was the beginning of the form of American liberalism that we see today.  A run away spending spree designed to create a utopia centered in the middle of the most prosperous nation on earth.  A perfect society where every man woman and child is born into a community of comfort and complete balance.  Every city was clean, well built and organized.  Every person was educated, cultured and informed.

There is nothing wrong with this idea.  The unfortunate missing piece of this plan is that it is based on the premise that every American strives to create their own wealth and prosperity and this Great Society's safety net is there to push them on their way or temporarily catch them when they fall.  These programs have come to be relied upon as a never ending source of income to our poor.  Too many of them no longer wish to work for something more than what they are given.  The desire to achieve has been removed from the section of the American economic spectrum that needs it the most.

Johnson stated later in his speech; ""The Great Society rests on abundance and liberty for all. It demands an end to poverty....The solution to these problems does not rest on a massive program in Washington, nor can it rely solely on the strained resources of local authority....We have the power to shape the civilization that we want. But we need your will, your labor, your hearts, if we are to build that kind of society."

People stopped listening once they heard "end to poverty".  Politicians figured out that creating a welfare state of takers gave them tremendous political support and almost assured them of re-election.  This was a powerful concoction of political power wrapped in goodwill that had the face of a great idea.  The result is that today over 51% of American Citizens pay no federal income tax. We have become a nation of predominantly takers.

Our two party system gives the country a tremendous benefit of political check and balance.  The rampant spending created in the Johnson administration created the need for a conservative voice to take over Washington and pull back the reins.  This responsibility fell to Nixon in 1968.  A failed politician who could not be elected governor in 1962.  Suddenly he found himself President of a country embroiled in an unwinnable war in Vietnam and failed to focus adequately on the much more dire domestic economic condition.  Then ran head first into the Watergate scandal.  Johnson's Great Society of spending was left to fester.

Democrats who started to see the huge rising costs related to these programs had to act fast to give themselves political cover.  Our largest budget deficit before Johnson was $12 billion during the height of World War II.  In 1965, the year Johnson and Congress laid out the groundwork for his plan the federal budget deficit was $1.4 billion.  By 1968, when his plans were in full force across the country, the deficit swelled to $25 billion per year.  Twice the deficit of our most expensive year in a World War.  By 1974, the federal budget was out of control.  The democrats used the political control they had gained in Washington due to the Watergate scandal and put in place their cover story.  Baseline Budgeting.   The next year our federal deficit blew up to $53 billion.

The greatness of our society is the massive economic engine that creates, teaches and inspires ideas for future generations.  The only thing built out of spending programs is poverty.  Which, ironically, is the one thing the plan was originally created to abolish.