Page History: Losing Freedom by Installments

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Losing Freedom by Installments is a article that appeared in Qualified Contractor in November 1961. The article was reprinted in Republican philosophy and party activism : oral history transcript / and related material, 1982-1984 a book available on http://www.archive.org/details/repphilosophy00morrrich Archive.org

The content of the article follows closest with 'Encroaching Control'. In fact, the two titles mirror each other (government encroaches and takes control while the people lose freedom). The topics of the article are the same Reagan typically covered.

• Communism and its relationship to American liberalism
• The Expansion of the United States government
  • Social Security
  • "Socialized" medicine (Medicare)
  • Agriculture
  • Education

The article, however, does differ in a few ways. Reagan does not delve into the involvement of communists in Hollywood. He goes into a little more detail about certain Government Corporations.

Full Text (a work in progress)

RONALD REAGAN

Host, General Electric Theatre

Losing Freedom by Installments

Today all of us are convinced that the No. 1 problem in the world is the dispute between the free world and Soviet slavery. Here the situation has been highly publicized and yet the American people are confused, disturbed by a frustrating sense of failure, a desire for action but at the same time a concern that action might result in war. The enemy is not confused. To him the course is very clear he knows he is in a war now. This conflict was declared more than a century ago by Karl Marx. Half a century later Nicolai Lenin, the interpreter of Marx, made of this phony philosophy a Godless religion, with himself as the Messiah. He reaffirmed that declaration of war by stating it was inconceivable that communism and capitalism should exist for a long period side by side in the world, and that ultimately one or the other must conquer. Carefully and painstakingly, but openly, they put into print their plans for our destruction. All of it including the timetable, is available and as near as our public library.

With arrogant cynicism they say; that our ignorance of their tactics and strategy, their aims and objectives is communism s greatest weapon. In 1923 Lenin announced that communism would take Eastern Europe, organize the hoards of Asia and then surround that last bastion of capitalism, the United States, without even having had to take it. In Lenin's own words, the United States would fall into his outstretched hand like overripe fruit. As we look at the beachhead 90 miles off our Florida coast we know how far they've progressed with that plan.

Carefully, with great calculation, the communists gauge their aggression slicing each new gain just thin enough so that won't say, "That isn't worth fighting for." They predict that when we reach the final slice our surrender will be voluntary because we will have been weakened from within morally, spiritually, and economically.

They have harnessed the fear of war instead of war itself knowing that surrender at the conference table can be just as complete as surrender on the battlefield. Indeed, they prob ably have no intention of testing our armed might. They know, even if we don't, that ours is the greatest military power in all the world. You and I, and all free men everywhere, owe our freedom to the determination and dedication of our men in uniform who stand as the only barrier to world slavery.

Mr. Khrushchev has said that capitalism will inevitably evolve into communism, but not all at once. He says there will first come an intermediate stage of socialism. Supremely confident of victory, the communists say we will give up more and more of our democratic practices under the pressure of the cold war until one day we'll waken to find we have become so much like the enemy that the reasons for enmity will have disappeared.

Haven't we been trying to fight communists without really fighting communism? There is a liberal philosophy that seems to think of communism as simply an extension of extreme liberalism and that Soviet police state brutality is not an integral part of communism but is rather an error superimposed on the political system. Those motivated by this so-called liberal philosophy believe the solution to the cold war is to refrain from any overt act that would anger the men in the Kremlin, while our own system is reshaped into a government controlled and directed economy. As we move left, the rough necks in the Kremlin, ashamed of their ways, will supposedly come a little right and the conflict will dissolve in one world Utopia.

The liberal campaigns for more and more participation by the federal government in areas heretofore the province of the state, community and individual. The only common denominator needed to win their support of any legislation is the extent to which it will increase the power and authority of the central government.

It would be immoral and the height of folly to infer these people are less patriotic than ourselves. They are sincerely motivated by the most humanitarian of ideals, but it would be equally foolish to let them have their way without opposition. If someone is setting fire to the house, it doesn't matter if he is a deliberate arsonist or just a fool playing with matches, the damage will be the same.

We can lose our freedom all at once by succumbing to Russian aggression, or we can lose it gradually by installments the end result is slavery. Professor Schlesinger says "The political argument for the welfare state is that the welfare state is the best insurance against revolution." This just isn't true. Our defense against communism is individual freedom and our free economy.

This fight isn't new. In 1917 one of the truly great labor statesmen, Samuel Gompers, founder of the A. F. L. said, "Compulsory social insurance is in its essence undemocratic and it cannot remove or prevent poverty. The workers of America adhere to voluntary institutions in preference to compulsory systems, which are held to be not only impracticable, but a menace to their rights, welfare and their liberty. Compulsory sickness insurance for workers is based upon the theory that they are unable to look after their own interests and the state must interpose its authority and wisdom and assume the relation of parent or guardian."

Under high flown phrases "freedom from want," "human rights," we see the federal government laying its hand on housing, health, farming, industry and education.

An illustration of this is the legislative battle that has raged over federal aid to education. Knowing the normal desire of all of us to provide the utmost for our children, we have been told that an adequate educational program is impossible unless we turn to the federal government for subsidy. An emergency situation is described involving crowded class rooms, teachers who are underpaid and too few in number. In the face of this we learn that 99.5 per cent of our school districts have not reached their limit of bonded indebtedness. The construction of classrooms has been increasing at a faster rate than that of student enrollment in the past decade. A 41 per cent increase in student enrollment from 1950 to 1960 has been matched by a 125 per cent increase in spending at the state and local levels over the same period. According to the educationists 60,000 classrooms must be constructed every year for the next 10 years if every child is to have the opportunity of a full-day education in an adequate classroom. These people seem to have forgotten to mention the fact that we have been building an average of 70,000 classrooms a year for the last five years. A continuation of this rate, according to some informed sources, may give us a surplus of classrooms by 1970 and it is more probable that sometime in the 1960's school construction will start to decline. Nor do they tell us that it has been estimated that the post war baby boom has been passed and that in the immediate years ahead the increase in the rate of enrollment is expected to decrease.

Teachers have been underpaid, but we are making progress without federal aid. In these first several years the average salary of teachers has risen from S3 100 to $5200 a year for generally nine months of work. Little evidence has been introduced which indicates a need exists for federal aid. The professional educationists lobby (one of the biggest spenders in Washington) denies federal control plays any part in their plans, but in truth, a federal school system is the entire basis for the school aid plan. The foot in the door was the National Defense Education Act of 1958. Graham Barden, the former chairman of the House Education & Labor Committee, reportedly said that the purpose of the current $2.5 billion federal aid bill is to centralize power over the school system here in Washington so that it will be easier to apply concentrated pressure.

Twenty-seven years ago the government assured the farmer that subsidy didn't mean control. Then a farmer named Haley discovered he could be fined $4000 for raising wheat on his own land and feeding it to his own cattle. The fine was up held by the Supreme Court with a single sentence ruling that said, in effect, that an agency of the Federal Government has the right to tell a citizen what he can grow on his own land for his own use. Thus the Court practically cancelled out the 4th Amendment to the Constitution our protection against search and seizure. If federal farm agents think a farmer is violating a regulation - not a law, mind you, but a regulation of a bureau - they pronounce the farmer guilty and impose a fine without even a formal hearing, let alone a trial by jury. If the fine is not paid, they can seize property.

The farm program's reason for being is the control of overproduction. Billions are spent to store surplus farm products, and additional billions are spent to reclaim desert land and put it into production. The government will pay you not to plant and it will also pay you to fertilize your land so as to increase the crop yield. Last year the government lost 4.5 million acres of corn land. The government paid $150 million to keep it from being planted, and now it develops that the 4.5 million acres don't even exist, according to Senator John Williams of Delaware.

This "farm mess" involves only 1/5th of agriculture 80 per cent of the farm economy is still out in the free market regulated only by the law of supply and demand. Common sense would indicate the answer should be to get that subsidized 20 per cent out into that same free market, indeed responsible farm groups have so advocated. To the bureaucrats the only solution was to bring the other 80 per cent into the government program. Congress was presented with a bill that could have resulted in the licensing of every farm in America, the complete control of production and price, and artificial shortages to bring about a 15 to 25 per cent raise in the price of foodstuffs. Right now, under the feed grain program, we are told co operation is voluntary, but the Secretary of Agriculture has the authority to dump surplus grain on the market to break the price and force non-participants to join.

Medicine is an area dear to the heart of the statist. Government participation can be so easily justified on humanitarian grounds. No one wants to appear unsympathetic to those in need of medical care.

Today this country has the costliest government hospital plan in the world the Veterans Administration program. No one of us opposes the idea that a man disabled in the service of his country should be given the finest of medical and hospital care. I'm sure no one protested some years ago when it was suggested that a veteran not wounded in military service, but who was in need of medical attention and destitute, should be cared for in a VA hospital if the bed was not required for a patient with a service-connected disability. Today 3 out of 4 VA hospital beds are filled with patients suffering diseases or injuries neither originated by nor aggravated by military service. And each year the budget provides for expansion of the VA hospital facilities.

During the 86th Congress, former Congressman Forand introduced a bill, HR 4700, to provide a national program of government health insurance. His bill was overwhelmingly rejected. Now a re-write of that bill, limiting the benefits of citizens of Social Security age, is introduced. Proponents of the measure present an emotional appeal describing the plight of millions of senior citizens, ailing and without the means to provide adequate care. To oppose this measure is to be accused of throwing our elder citizens out to die. But what are the facts?

In the last 10 years, 127 million Americans have acquired some form of medical or hospital insurance. Seventy per cent of our people are so protected, including 2/3rds of our senior citizens. At the present rate of increase, it is estimated that 90 per cent of the population will be covered by 1970.

As nearly as we can determine, the problem involves less than 10 per cent of the elderly who would not be able to finance needed medical care. To this end, the 86th Congress adopted the Kerr-Mills bill to provide federal funds to the states. Without waiting for this to be put into effect, the advocates of the insurance measure claim the only answer to the problem is compulsory government health insurance for all, regardless of need. Never mind if the individual is already insured, has an ample in come or possesses great wealth. Perhaps there is a clue to their (rue purpose in remarks made by now Ex-Congressman Forand who has said, that if we could only break through and get our foot inside the door, then we could expand the program after that. Like an echo comes a pamphlet from the Socialist party entitled. "The Case for Socialized Medicine." It says:

"We can do everything possible to encourage federal intervention, the financing of medical costs on a bit by bit basis, and we can work to direct such intervention, so that if it isn't socialized medicine proper, at least it paves the way for socialized medicine."

It would be well for us to keep in mind that if you socialize the doctor, you can socialize the patient as well.

The flagship of the liberal cause is Social Security. It is offered as the proven vehicle for the medical insurance program. We are told that here is a government insurance program in which we and our employers pay into a fund so that someday in our non-earning years we will call on this, our own money, to see us through. Of course this isn't what officials of Social Security told the Supreme Court in a recent lawsuit. They said Social Security wasn't actually insurance but they used that term to sell it to the people. Social Security dues are a tax for the general use of the government and payment of that tax does not automatically entitle anyone to the receipt of benefits. The benefits are a welfare program which can be cancelled or curtailed by Congress at any time.

In 1935 that tax was 2 per cent of $3000 of income. Today it is 6 per cent $4000. If this medical aid bill is passed, the individual and employers combined contribution will, by 1963, increase from $288 to $444. This is based on a ceiling of $5200 of income, but the Secretary of Health Education and Welfare recently told a congressional committee he foresees a ceiling of perhaps $9000 on the amount taxed for Social Security. There are others who oppose any ceiling who say the tax should be levied against total income.

In this insurance program that is not insurance, we who are participating are unfunded to an amount more than $300 billion. In a proposal to make Social Security voluntary, Congressman Rousselot has pointed out that the young man 20 or 21 years of age, starting out at an average salary, must, with his employer, contribute $1.69 for every dollar he'll receive in benefits.

Turning from domestic welfare to the international scene, we find the same pattern of getting a "foot in the door" then freezing into permanence the temporary expedient. In the days following World War II, Senator Arthur Vandenburg gave his bi-partisan blessing to foreign aid with these words, "We are not suddenly resolved to underwrite the earth. That would be fantastic, improvident and impossible. The plan is for 15 months." It is now 15 years, and more than $100 billion later. The original 19 countries to be helped have become 97. Let's ignore the temptation to talk about items such as the road in South Vietnam which we started to build for $18 million and which isn't finished yet, at $125 million.

All such things we could swallow if free world strength, solidarity and friendship had resulted. We spent more per capita in Laos than in any other country. Cuba is on the book for $2.5 billion. In these 15 years, communism has, in addition, absorbed China, North Vietnam, and Tibet. Inroads have been made in Indonesia, Iran and Syria. They've tightened their grip on East Germany, Poland and Hungary. We've financed socialism in India, where the communist party has grown from 4 to 12 million in 5 years. In Bolivia part of our money was used to nationalize the tin mines, which reduced their output 50 per cent. Thanks in part to Yankee dollars, the cost of living in Bolivia rose over 250 per cent in 1956 alone. Last year the Bolivians staged the worst anti-American riots in South American history. Creating bureaucracy here and in the receiving nations we have in effect exported socialism under the Utopian ideal of world democracy and social revolution.

We talk private enterprise at home, while we finance nationalization of industry all over the world. But that shouldn't surprise us.

In May 1960 during testimony before the Senate Small Business Sub committee on Relations of Business with Government, Elmer B. Staats, Deputy Director of the Bureau of the Budget, said that as of July 31, 1959, the government owned and operated 17,507 businesses. A Subcommittee on the Hoover Commission found that as of the end of 1954, the Department of Defense alone was actively engaged in activities covering 47 categories ranging from coffee roasting to manufacturing surgical and dental equipment. Operating these businesses in most instances, tax-free, rent-free, dividend-free, in competition with our own citizens, the government loses billions of dollars each year.

The Depressed Areas bill enacted into law on May 1 has put government's foot in the door of direct control of job training and placement, including subsidy and relocation of industries and at the same time has created the biggest potential pork barrel of all time.

We subsidized public housing originally so that no one should be forced to live in degradation. Now people of better than average income are declared eligible for such a subsidy and the Chicago Public Housing Authority announces a plan to add swimming pools, and recreational facilities, including professional directors.

These are just a few of the things that have led to the creation of a permanent structure of government so complex it is virtually beyond congressional control, and certainly is self-perpetuating. Congressman Utt has suggested that we are rapidly coming to a point where a complete change of elected officials, including Congress and the White House, can mean little change in policy. We are governed more and more by people for whom we have never voted for whom we never will vote, and whom we cannot recall by our vote. Even at Cabinet level, much of die policy is set by Civil Service employees who have been with the department for 20 years. They have no intention now or ever of recommending to the Secretary any policy which does not fit their personal philosophy of government. This Is a form of invisible government and can lead to the most oppressive type of tyranny.

Two years ago a subcommittee of congress reported there were almost 2.5 million Federal employees. The committee reported it found little evidence that any bureau, agency or department created in answer to an emergency ever went out of existence, even after the emergency disappeared.

Congress abolished the Reconstruction Finance Corporation in 1957, but, it has spent over $1 million since then. The current budget contains an item of $65,000 for administrative expenses. The Federal Farm Mortgage Corporation formed in January, 1934, has made no loans since the depression. The authority of the Commissioner expired in 1947 since 1950, running expenses have amounted to $4 million. Congress ordered the immediate liquidation of the Spruce Products Corporation in 1920. In 1930, they tried again. In 1947, it was still in business. In 1948 they found the answer they cut off its appropriation. This was the agency created in World War I to find spruce wood for airplane fuselages.

All of this vast government complex has been created by a tax system which refuses to recognize any limitations on its right to confiscate the earnings of its citizens.

No nation in its history has survived a tax burden that reached a third of the national income. Today the tax collectors take 33 cents out of every dollar earned and of that 33 cents, 23 cents goes to the Federal government, leaving 10 cents for the state, county and local community. It is no wonder we turn to the federal government for aid. but wouldn't it make more sense to leave that money in the local community to begin with instead of running it through that Puzzle palace on the Potomac, only to have it returned minus a carrying charge?

Early in our history we were warned that the farther the spending was removed from the source of taxation, the less restraint there would be in its spending. Today, shocking figures prove the truth of this. When you contribute to your local charities, you must give $1.10 for every $1 that is to be spent in good works. County welfare sees an increase in this overhead to where $1.23 must be raised for every $1 actually spent on welfare. At the state level it takes $1.49 and the federal government must raise $2.10 for every dollar it will spend on the recipients of federal welfare a $1.10 overhead for each $1.

To meet this overhead, we are burdened by hundreds of hidden and indirect laves, accounting for 1/3 of our phone hill, 1/4 of the price of a new car, 1/2 of the gas and oil we use. More than 100 make up half the price of loaf of bread.

All of these pale into insignificance beside the enormity of the graduated income tax. It too follows the pattern of a modest beginning. It began as a 2 per cent levy and that on only the top incomes. In the lifetime of most of us, this simple 31-word law has grown to more than 440,000 words. It begins at 20 per cent and has its steepest rate of increase through the middle income brackets, where are to be found the bulk of our small businessmen, professional people and skilled craftsmen. At $16,000 a man begins giving the government half of the dollar he can earn and from there it goes up to the confiscatory 91 per cent. There is no moral right in a government taking anywhere from half to 9/10ths of the dollar a man can earn by his own ability. Beyond that is the fact the government can not justify such confiscation on the basis of real need. The government s total grab from all the 50 per cent to 91 per cent brackets is less than 3/4ths of $1 billion.

Because of our willingness to accept the idea that those best able to pay should lighten the burden of those with lesser earnings, we have adopted as proportionate taxation this progressive system spawned by Karl Marx and declared by him to be the prime essential of a socialist state the method prescribed for taxing the middle class out of existence. For an illustration of the difference between proportionate and progressive tax, we can look to the Bible. There tithing is explained as the economic basis of our Judaic-Christian religions. The Lord says you shall contribute one-tenth and He says, "If I prosper you 10 times as much you will give 10 times as much." That is proportionate but look what happens today when you start computing Caesar s share. A man of average income suddenly prospered 10 times as much would find his personal tax increased 43 times.

If the government confiscated all taxable income above $10,000 a year after exemption and deductions the increased revenue wouldn't pay the interest on the national debt.

Defense is given as justification for the tremendous increase in the federal budget and yet since 1953 (the end of the Korean War) defense spending has only increased 1 per cent, while non-defense federal spending has increased 63 per cent.

We are told by some congressmen that spending programs are forced on them by pressure groups. Two years ago I was a member of a pressure group. I appeared before the House Ways & Means Committee to present the demand of 33 unions and the management of the motion picture industry for a tax reform program. In a month of unprecedented hearings, every segment of the national economy was represented before that committee and every representative demanded lax reform. Eighty-five per cent of those testifying asked the committee to bring forth one particular bill which three years later is still buried in the committee. It would seem pressure groups are irresistible only if they favor spending.

Several months later they held additional hearings, but this time no volunteers. A group of hand-picked campus economists appeared before the committee and spoke only of the government's need for more revenue, not less. Their idea of tax reform involved rate reductions to make it "more palatable," but called for an end to deducting real estate tax before computing income tax. Interest on home mortgages should not be deductible, nor should contributions to educational groups at 100 per cent. Capital gains should be taxed as straight income. Government should use the tax as a police power to determine what constitutes necessary advertising and expense. Most of the legitimate deductions, without which the programs would have long since been proven unworkable, were called loopholes. A man, now assist ant secular) of the treasury in charge of tax policy, has even explored the possibility of estimating the amount of rent a taxpayer saves by owning his own home and then paying in come tax on that amount.

All told, these economists were sure their program would get the government $18 billion a year more in revenue, and they just happen to be standing by with $18 billion worth of welfare programs they want the government to adopt.

The big spenders reject the idea that the least government is the best government. According to them, you and I are not smart enough to spend our own money. Government should take it from us through taxation and buy for us the welfare programs we are too stupid to buy for ourselves. Their high ideals cannot excuse the fact that it is dishonest to seek social legislation under the guise of taxation. If we are to adopt socialism, then let it be presented to the people as socialism.

Proponents of Keynesian economic theory tell us the national debt is meaningless: It is, it's incomprehensible. Who can understand $298 billion? If I held a stack of $1000 bills in my hand just 4 inches high, I'd have $1 million. If we had the national debt piled up before us in $1000 bills, the pile would be more than 18 miles high. It is a greater amount than all other governments have spent since the beginning of government itself.

Reduction of and economy in government is where we must start. We must demand that congress put an end to deficit spending: that government stay within the limits of its revenue; and that provision be made for regular payments on the national debt. Then we must demand tax re form of the kind that will reduce the percentage of national income confiscated by the government. We must restore the right of a man to keep the fruit of his toil.

To this end, may I suggest the bi-partisan bill still buried in the House Ways & Means Committee the Herlong-Baker bill (Herlong is a Democrat, Baker a Republican). This is one of the better prepared tax reform measures to be presented in half a century. Over a five-year period, it gradually reduces corporate and personal income tax to a 15 per cent level with a 47 per cent ceiling on surtax.

In the vast permanent structure of government, you and I cannot recommend specific areas where savings can be effected nor can congress, beyond a certain point. However, every businessman knows that if you reduce government income and then issue a blanket order to every department-head and bureau chief that his budget is reduced by that same percentage, he'll know where the useless fat can be trimmed.

Of course there will be screams. It will be said that it is dangerous to reduce taxes before reducing spending. They are talking through their hats. Government doesn't tax to get the money it needs government will always find a need for the money it gets.

We can do this by accepting our responsibility as citizens. In the coming election year (regardless of party, because this struggle crosses party lines) we must pin down those who solicit our votes as to where they stand on old fashioned economy and tax reform. We must write to our congressmen and senators giving our objection to specific bills where the money cost and the price in individual freedom is too high. Write them now and then just to praise them when they are on the right track. Don't belittle this simple procedure. It was just this kind of pressure that stopped (at least for the moment) the school aid bill, headed off the socialization of our farms, restrained some area? of foreign aid, and so far ha> delayed the medical aid pro gram. Writing isn't complicated just put his name on the envelope, then address it "House Office Building" or "Senate Office Building, Washington, D. C."

We must do more than just stop spending measures. Containment won't save freedom on the home front any more than it can stop Russian aggression on the world front. We must roll back the network of encroaching controls. We can do it as individuals we won't need any great new organization.

James Russell Lowell, as Minister to England, was asked how long he thought our Republic would endure. He answered, that our Republic would endure as long as the people keep the ideas of the men who founded it.

And what were those ideas? The founding fathers that little band of men so advanced beyond their time the world has never seen their like since created a government based on the theory that you and I have the God-given right and ability to determine our own destiny. Here took place the only revolution in all history that didn't just exchange one set of rules for another. They shaped a government, bound it with a Constitution, and said its only function was to be a watchdog over man s freedom. They never planned that it should become a cow to be milked.

Here for the first time the individual genius of man every man was unleashed. Six per cent of the world's population on 7 per cent of the earth's land surface created and owns more than 50 per cent of the world's wealth and that wealth has been distributed more widely among our people than in any other society since time began.

There were no fringe benefits at Valley Forge. The West was won without an area re-development program.

Now you and I must answer once again whether life is so dear and peace so sweet as to be purchased at the price of chains and slavery. If we are willing to pledge our lives, our efforts and our sacred honor, then we must one day spend our sunset years telling our children and our children s children what it once was like in America when men were free.

Reprinted from QUALIFIED CONTRACTOR. Nov 1961

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