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Effects Of A Pluralistic Democracy Essay

1363 words - 5 pages

The function our pluralistic democracy is the cause of America’s recurring economic problems and contributes to growing income inequality. Inflation/stagflation (inflation with slow economic growth) perpetual trade deficits and perpetual federal budget deficits which contribute to the U.S. national debt are the major recurring economic problems that threaten the prosperity of the nation. These recurring problems are largely the unintended consequences of pluralism, the interaction of many groups in the American political process. (Michael G. Roskin, 2010).
A closer look at the recurring economic problems
Inflation and stagflation are often part of the “business cycle”, the tendency of economy to alternate between periods of growth and recession (economic decline) over the course of several years (Michael G. Roskin, 2010). Although these two economic issues are not mutually exclusive, in recent history, when inflation goes up, the economy slows down. It should not be surprising that inflation and slow economic growth have an inverse relationship in a monetary system that relies heavily on consumer and business credit. Inflationary conditions of any significance would naturally and logically lead to a slowdown in consumer activity thus leading to stagnation in economic growth.
While the U.S. trade deficit might not be viewed as a problem, since a trade imbalance means cheaper consumer goods for the U.S. population and increased foreign investment means greater prosperity (Michael G. Roskin, 2010), it does have a deleterious effect on the prosperity of the American working class as the demand for cheap goods makes outsourcing an attractive and profitable option for American business.
The U.S. penchant for keeping taxes low while increasing spending year after year contributes greatly to the deficit and by extension the national debt. With growing mistrust of the U.S. dollar abroad, largely the result of the 2008 global recession, running trillion dollar deficits will only exacerbate future recessions and debase the dollar in relation to other currencies, leaving the U.S. vulnerable to having the dollar replaced by another currency as the reserve currency of the world.
The Entitlement Mentality
The establishment of Social Security in 1935, Medicare in 1965 and various other so-called entitlement programs have created a “entitlement mentality” in which large segments of the population have not only come to expect government funds to support them, but they demand it via interest groups like the American Association of Retired Persons (AARP). These programs are part of the mandatory portion of the federal budget which means they are not easily cut or reformed as they require an act of Congress to do so (Michael G. Roskin, 2010). These programs benefit senior citizens who are a reliable voting bloc, thus making Social Security and Medicare a “3rd rail” that politicians can never seriously threaten without drawing intense fire from the AARP and...

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