From the Easy Chair

The Economic Scene in the 1990s

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels and Sermons

Lesson: 105-214

Genre: Speech

Track:

Dictation Name: RR161CC147

Year: 1980s and 1990s

Dr. R. J. Rushdoony, RR161CC147, The Economic Scene in the 1990s, from the Easy Chair, excellent colloquies on various subjects.

[ Rushdoony ] This is R. J. Rushdoony, Easy Chair number 257, January the eighth, 1992.

This evening Otto Scott, Douglas Murray and I are going to discuss, first of all, the economic scene in the 1990s. I am going to ask Douglas to introduce the whole subject because he shared with us a book by Larry Burkett The Coming Economic Earthquake. And also the videos of Annenberg and Burkett.

I shared a platform in 1980 with Larry Burkett in southern California. He is a Christian financial consultant and a very down to earth and realistic person.

Douglas, do you want to introduce the general subject as Burkett has stated it?

[ Murray ] Surely. Larry Burkett essentially his book is wrapped around government figures. He hasn’t invented anything here. He has simply taken statistics and projections that are generated by the US Commerce Department and other agencies and they paint a rather startling picture of where we are and the recent changes or history of those statistics paints a rather grim picture of where we are headed. And essentially his allusion to an earthquake is drawn from the fact that we had several tremors in our economy and that we should heed them.

For instance, the failure of the savings and loan industry and the fact that the tax payers will have to pay a 700 billion dollar bail out fee and that many banks, including the 20 largest banks in the world, are essentially insolvent because if you liquidated all of their assets they could not return the funds to the depositors. And insurance companies have invested in leveraged buy out securities known as junk bonds and are heavily invested in non performing real estate are on the verge of being in trouble.

And his warning is, is that if the government spending continues at the current rate that it will wipe out personal bank accounts, insurance policies, retirement programs, social security and jobs of a large segment of our population. He goes on from there to detail how we ... the history how we get there and then at the end of the book he has some suggestions which we can get into a little further along about what people should be doing to try to avoid the brunt of this because many people are going to... particularly the middle class people are going to be totally wiped out financially.

[ Rushdoony ] Burkett called attention to the huge national debt. What parentage of the annual receipts of the United States go merely to pay the interest on the national debt?

[ Murray ] Well, he cited right now the national debt is 3.8 trillion dollars and that is just on the debts that the government calls on the books. They have unfunded liabilities which go beyond that. But right now 240 billion dollars this year will be paid in interest alone and that is 40 percent of all the taxes collected in this country and that... well, a little clearer picture of that is all tax payers west of the Mississippi, 100 percent of everything that everybody pays in taxes of all tax payers west of the Mississippi goes currently to pay the interest on the national debt and at the current rate of increase in government spending by the year 2000 the national debt will be 13.5 trillion. And in order to service the debt it would take 100 percent of all the taxes to service the debt and there... that means that they will have to ... in order to handle that they would have to cut government spending by 40 percent and they would have to increase the current tax rate, which is around 22 percent, to a rate of 50 percent.

[ Rushdoony ] That is the federal tax rate.

[ Murray ] The federal tax rate, right.

[ Rushdoony ] He also feels, does he not, that this point of no return, when 100 percent of all the tax receipts will go simply to pay the interest on the national debt meaning nothing left over for any program or the operation of the federal government.

[ Murray ] That is correct.

[ Rushdoony ] Could be reached as early as 1996.

[ Murray ] That is correct.

[ Rushdoony ] Four years away.

[ Murray ] The... the most pessimistic estimate is somewhere around five years, which, at the time the book was written would place it in about 95 or late 95. And the most optimistic estimate is the year 2000.

[ Rushdoony ] That is a grim outlook and I am afraid, having read his book, he is assuming that we are not going to add new entitlements to the national budget or the national health program that they are talking about, all of which would hasten the day.

[ Scott ] You know, I wouldn’t be so sure about that. The Democrats are going to run on a national health program.

[ Rushdoony ] Well, I agree with you and I think they have so little common sense that both parties will go along with it with no awareness of what they are doing. I was interested. One of our staff members—I won’t mention names of anyone involved—was talking not too long ago with a member of a family, one of the most important in the country and at this meeting with one of the high financial figures of the administration present there was no awareness of the coming disaster. And the feeling apparently is that they are going to come up with some answer. Neither party is concerned with the problem you are talking about. They are blind me walking towards the edge of a cliff.

[ Murray ] Well, this seems to be the case. Burkett says that now as in the past, historically, there have all... there have only been three options for government. They can either default on the debt which means that everybody that has got a t-bill or a government bond of any kind will simply be wiped out. Not only will they lose the interest income, they will lose the money that they have saved to buy the instrument in the first place. The second thing is they would have to cut spending 40 percent and they would have to raise taxes in order to handle that kind of debt level. Or the third one, which historically from the beginning of time which governments have always resorted to is to print money. And which essentially makes everybody’s savings worthless anyway.

[ Scott ] Well, I understand that M1, which is money, is up 13 percent. So they have already started on that.

[ Rushdoony ] Yes. 13 percent inflation.

Now at this point I think there is a very serious mistake that most people make and it is a very distressing one. I wrote a book some years ago on The Roots of Inflation, a paper back which is still available for only five dollars. We could not make it available for that now. This was published in 1982.

[ Murray ] Inflation has made it worth 10 dollars now.

[ Rushdoony ] Easily.

[ Murray ] Yeah.

[ Rushdoony ] Easily. And in it I discuss the theology of an inflationary world and the evils of it. But everyone tells me, “But the book is irrelevant now. We are seeing deflation all around us.”

And the answer to that, of course, you are seeing the economy deflate. But you are going to see paper money inflate.

[ Murray ] Well, one of the things that he pointed out which is very true and people have to realize it is that in the Depression everybody... or after the Depression of the 30s when the government, the New Deal put in all of these controls with federal reserve banking and so forth, everybody thought, “We have turned the problem over to the federal government. This can never happen again.”

And I can remember people saying, making this statement when I was a kid, because I was born in the middle of the Depression that when I would say, “Gee, if it happened once, couldn’t it happen again?” And everybody would assure me, no. That can never happen again.

[ Rushdoony ] Yes.

[ Murray ] And people have just got to realize that it can and will happen.

[ Rushdoony ] Otto?

[ Scott ] Well, we are seeing a deflation in terms of prices, commodities which has given the press, which is economically sad... staffed by economic illiterates, it has given the press the idea that inflation has been conquered. But it hasn’t. Of course with M1 up 13 percent. That is a big shot in the arm in an election year. What we are also seeing is a contraction of our productivity, not simply stores, but factories, mines, mills, all our productive apparatus is beginning to close down.

Now at the same time the government is going to release hundreds of thousands of people from the military and it is also cutting back on military programs, the construction of submarines, the construction of airplanes and so forth. Now what I think Congress does not quite understand is that a manufacturing or technical enterprise is like a baseball team. Once you shut it down and disperse the players, you have dispersed a talent pool which took years of experience to put together and once you wipe it out, you cannot put it back together in a hurry. It takes more years to build new teams. You can’t call back the old teams. You can’t call back a closed factory. You close down a refinery, it turns into rust. You close down a mine and everything gets obsolete. We are watching the closing down of the United States in terms of productivity. That just doesn’t mean unemployment. It means a shortage of goods. It means that certain things, certain commodities leave the market place for an indefinite period of time.

One of the great calamities... one of the great tragedies, I think, of the 30s was all the broken dreams, all the plans and hopes and careers that had to be cancelled. Men who were I their 40s were practically wiped out by the Depression of the 30s, because by the time they got through with the Depression and the war they were in their 60s. And we are watching here a great many people in their prime don’t realize that the end of the tunnel here may be quite a way off.

Now the piggy international has sent a team of men down to South America to find out how they survived hyperinflation. And all the South Americans that were interviewed in Argentina, Bolivia, Peru and Brazil who are astonished that the Americans came down to ask these questions, because they said the United States is doing exactly what we did. You are following our path precisely.

And what it meant, what it means for the people down there is that they go into what amounts to a cash economy and a barter economy. The credit cards are wiped out because a credit card is based on the idea of a price that is fixed for at least a month. In fact, the South Americans were astonished that American bankers were still putting out 30 year mortgages. They said, “How can they in the face of this inflationary {?} rise? How can they even dream of putting out a 30 year mortgage?”

[ Murray ] Because they are on FHA loans which are guaranteed by the tax payers though the federal government. That is why. On non.... on non FHA loans you have to take a variable rate which means that the percentage of interest that you pay rises and falls with the market.

[ Rushdoony ] You mentioned something very important, namely the teams that are built up in a manufacturing enterprise. This past weekend Dick Nichols was telling me of one major corporation which, as it grew over the years, would take a outstanding man, skilled in a particular area and help him set up a separate shop manufacturing a particular part or a particular product so that they ended with a vast network of subsidiaries, really more or less independent, under these expert men. Now all of that is collapsing so that they are losing a vast number of high specialized skill workers who are being scattered all over the landscape as they are going hither and yon looking for any kind of work to put bread on the table.

[ Scott ] Well, we got into this in the first place, technologically speaking, by falling in for Giantism. Detroit built larger and larger factories employing tens of thousands of people. And so did practically every other industry. The tire industry, great big factories with thousands of thousands of people. When the Japanese competition began Detroit was caught and it was a dinosaur of its own making. It couldn’t retool and refashion and turn around in less than a decade, whereas the Japanese with small plants in a small island were able to move quickly. They could move in a decade change after change after change.

[ Murray ] Plus they lead the world in robotic technology which assembles their automobiles.

[ Scott ] So we have... first of all, we were hooked with all these giants, vertical organizations. Entrepreneurship also had begun to decline in this country after World War II. Instead of ... I don’t know how many men I have talked to who told me that their sons didn’t want to go into business. They didn’t want to inherit... didn’t want to run the family business. They wanted to go to school. They wanted to go to college. They wanted to be professors. They wanted to be physicians or lawyers or whatever. Well, of course, every country needs professionals. But professionals maintain the country. They do not build the country.

[ Murray ] That is an important point.

[ Scott ] The entrepreneur type build the country. And the United States stopped being an entrepreneurial country and became a professional country. It even talks in terms of its language after World War II. Instead of leadership they talk about managing. And they talk about systems. They didn't talk about people. The business heroes vanished. And this is all part... in the meantime the world around us has changed. We have got an industrialized world growing up all around us, not simply in Asia, but in Latin America as well. There is a better steel industry functioning in Brazil, believe it or not, than we have, and a bigger one.

[ Murray ] Well, the media did their part in convincing a generation that business was inherently evil even though it feeds us.

[ Scott ] Well, ... well I think managers always felt that entrepreneurs were evil because entrepreneurs shake things up. But one of the things that has happened to us in the last few years in particular in the 80s, the merger and takeover mania of the 80s is that roughly 800 billion dollars worth of corporations that were once on the New York Stock Exchange have vanished. They have been eaten and digested and broken up into parts and their assets sold, their teams broken up, which is one of the reasons for the increase in the stock exchange. I mean, when the government moves in and unilaterally changes the interest rates which really belong to the market to set, it means that everyone who had any other kind of interest commitment has been cheated. The government has suddenly lowered the interest rates so that the CDs and all the rest of these investments become worth much less than they did before.

They have gone into the stock exchange and the stock exchange having less people in it than it had before, has reaped the benefit of higher prices, higher, in my opinion, than they deserve at this point.

[ Murray ] Much higher.

[ Scott ] So what we are... what we have done is that we have moved from a productive economy to a speculative economy. You can make more money with money than you and building things or selling things or making things. In other words, it is all paper.

[ Rushdoony ] Yes. And we have been in an inflationary economy which will be worse before the end of the decade. Now this, in itself, is very deadly. For example, a great deal has been said in recent years about the competition of Japanese auto makers. But what has happened since 1970 is that the total number of automobile sales each year is dramatically lower, dramatically lower. And if you take the combined Japanese, American, German, Swedish all Italian and other automobile sales in the United States the total number is way below the total number of 1970, dramatically lower. And it is because inflation has priced the automobile out of the reach of more and more Americans just as housing also has been priced out of the reach of most people.

[ Scott ] That is a very good point. In order to buy a car own they have payments that run for five years. So that means that everybody keeps their car longer than before.

[ Rushdoony ] Yes.

[ Scott ] So there is less of a turnover. Now a car was what? Seven hundred dollars in 1939. And now it is 15 to 20,000.

[ Rushdoony ] Yes.

[ Murray ] The are making as much money on the interest as they are profit on the car.

[ Scott ] So that, again, it is a speculative economy.

[ Rushdoony ] Yes.

[ Scott ] It is a money economy, but it is... it is not a goods economy. And this overlooks... this... this is a period of decline which has masqueraded through the 60s and 70s as a period of boom. It has been a rather steady decline.

[ Rushdoony ] Yes.

[ Murray ] It has all been done with debt.

[ Scott ] Yes, it has been done with debt. It has been done with credit.

[ Rushdoony ] Well, Burkett says that from 95 to the end of the decade we are going to see the interest on the federal debt equal the annual income of the federal government. At that point Washington will be bankrupt. It will not be able to maintain a single program and it will no doubt enter into a period of confiscating just about every asset in the banks and insurance companies, pension funds, you name it.

[ Murray ] Well, one of those more chilling predictions which I arrived at six months ago is that the tax deferred IRA retirement programs that people have where the government passed this law which is almost like a free lunch where you get to defer taxes on both the money that you invest as well as the interest until you retire now constitutes a pool of money that is 650 billion dollars and that is going not be terribly tempting when the federal government gets their back to the wall. And he predicts that they will sweep all that money into the social security fund which will then sweep it into the general fund.

[ Rushdoony ] Yes.

[ Murray ] Because there is no money in the social security fund. There is nothing there but IOUs. There is on pool of money there.

[ Rushdoony ] I think the IRAs are a fraud because it is just the accumulation of funds for the federal government to expropriate. When they set up the IRA I warned everyone to steer clear of them. Washington never gives anybody a break.

[ Murray ] No free lunch.

[ Rushdoony ] No free lunch.

[ Scott ] Well, it is interesting that Figgy whose figures Burkett cites, he has got some of Figgy’s charts...

[ Rushdoony ] Yes.

[ Scott ] ....does not really think that we are going to go into the hyper inflation. He thinks that the government will take apparently autocratic moves before that. But the problem here is that hyperinflation can occur within a week. It doesn't come... we... we have already gone through the usual historic three generations of build up towards such a collapse. Historically the ... when the bezant was adulterated, for instance, and other occasions, it has taken almost 90 years for a large civilization to destroy its own economy.

Now we started this when we went off the gold standard.

[ Rushdoony ] Yes.

[ Scott ] ... domestically and internationally. So we have an economy in which the basic unit of measurement is so elastic that you have to look in the newspaper every day to see what the dollar is worth. This is like having architecture in which the inch or the yard changes its dimensions every 24 hours. That is obviously it ... it makes for instability. There is no way of having stability if you have a... a fluctuating currency. And the thing that is neither Figgy nor Burkett talk about, but which intrigues me, is the fact that this is a world economy. In Brazil and Argentina and Peru and former the Soviet Union, these people have retreated to dollars in order to have some kind of currency to deal with. But if the dollar falls, all the currencies fall.

[ Rushdoony ] Well, today people who are in international trade, that is they are buying things from abroad to sell here, are in deep trouble or are going out of business, because with the variable rate, let us say, of the franc or the mark or the pound and the dollar and the lira, you buy something and the value of the dollar and the currency in which you bought it varies and your margin of profit ...

[ Scott ] That is right.

[ Rushdoony ] ... is wiped out.

[ Scott ] Well, you can’t tell.

[ Rushdoony ] No.

[ Scott ] You may make a profit, more profit, or you may lose more.

[ Rushdoony ] And Chalcedon receives checks from a number of foreign countries. And the interesting thing is that sometimes we have to wait before a check is put through, because that particular currency is jumping around at such an alarming rate.

There are some countries that money from there is no good unless it is in dollars. They simply won’t put it through.

I tried taking things on the trip to Britain to Deke’s and not every currency was accepted.

[ Murray ] Well, I think you can... you can label that as another tremor of this coming earthquake when you have unstable exchange rates.

[ Rushdoony ] Yes. In one instance it took me two weeks to have a check put through, because that particular country, one of the more stable ones, was having some internal problems and its currency was bouncing so much that they did not want to put it through until it settled a bit.

[ Scott ] Well, the economy and politics are two sides of a single coin. The government and the economy always move together. Now I got a call from a fellow in Michigan today who was invited to head up the Buchanan for President effort in the state of Michigan and he wanted to know what it thought about it. He was calling a number of others. And we ... he took the occasion and we both did to discuss the overall political outlook. And I gave the opinion, which I have just recently come to—that the Democrats will draft Cuomo. And that saves him the trouble of going through the primaries and spending all that time and money and wearing himself out and he will be... he will be nominated by acclamation because he is their best speaker. He is a demagogic spell binder, as a matter of fact. And he is also a rather ruthless man who I am told will call up reporters when he doesn’t like something they have written and threaten them in a very chilling way.

When you put together these qualities of being a demagogue and being eloquent and being ruthless and the fact that we are coming into a crisis, it adds up to the profile of an autocrat. And an autocrat is what a crisis generally evokes.

[ Rushdoony ] Yes.

[ Scott ] Well, if that scenario sounds plausible only if Mr. Bush continues to render himself ridiculous as he is doing and loses the election. I think there have been too many photographs of him in short pants, myself. He is ... he is front stage and center on every occasion. He is his own press man. He is his own commerce secretary. He is his own secretary of state. He seems to be afraid that anyone else will ever say or do anything during his regime at the top.

So I would say that he would have difficulty winning an election and Republicans will certainly nominate him because they always—as Howie Philips says—they are royalists and they only go for the king. They even re-nominated Herbert Hoover in 1932. It didn't even occur to them to run a different man. So they are not going to change this time. So therefore Cuomo will have, I think a good party. But the Democrats are also running on a platform of national health care at a time when Medicaid is beginning to take over Medicare. They can’t even take care of the health of the elderly. How are they going to take care of the heath of everybody?

[ Rushdoony ] I was interviewed today by telephone and in the light of what you said about the presidential campaign, I was asked what the big event of 1992 would be and I said, “The election of a sacrificial lamb for the presidency.” And I am afraid that is what it is going to amount to.

[ Scott ] Well, not of Cuomo got it, because Cuomo is a tough individual. He is an autocrat. He is threatening. And every time that every government has gotten into this particular position it has put down wage and price controls and total control over all industry and we have go the machinery in place...

[ Murray ] Well, Burkett brought out the fact that there is a change of mindset in the American public in the 30s to letting the federal government handle the economy. Now this is so ingrained in all these institutions and are in place. It becomes the automatic response.

[ Scott ] Oh, yes. Well, right now they ... the President of the United States is being blamed for the economy. He took the credit for it, so he gets the blame for it.

[ Rushdoony ] There is an excellent sentence in Burkett’s book The Coming Economic Earthquake and I quote. “The EPA, the Environmental Protection Agency, has become a paramilitary enforcement group running amok through the free enterprise system.”

[ Scott ] Running amok is a good term. Well, if ... if small business didn’t have troubles enough, the government is trying to load all its health benefits and other benefits onto the backs of employers as you were talking about earlier.

Well, it is an ingenious country. We have ... I must say I think as a nation that the American people have put up with more misgovernment than any other nation I know would be able to endure. But it can’t do much if it gets an autocrat from the White House who has no sense of limits when it comes to authority.

[ Rushdoony ] Well, I think the day of the autocrats and the strong men is gone as far as the United States is concerned and Roosevelt was such a one.

[ Scott ] Yes, he was.

[ Rushdoony ] But I think now the hostilities are such that when anyone gets elected he is immediately going to be the target of such hostility that there will be a breakdown of authority instead.

[ Scott ] Well, if there is a breakdown of authority you are talking about a much worse situation because...

[ Rushdoony ] Yes.

[ Scott ] ...you are really painting a darker picture than I was hinting at.

[ Rushdoony ] Well, the Chinese ideogram for crisis I was told years ago is a combination of two characters. And it means literally dangerous opportunity. So what we face is a dangerous opportunity.

Now I think that one of our problems today is that the common term used for economics is the dismal science.

[ Scott ] It used to be.

[ Rushdoony ] And very few people are interested in economics. Larry Burkett is a Christian. His book is published by the Moody Press. I received today a book by another Christian Steven Dallas Wilson The Bankruptcy of America published by the Ridge Mills Press in Germantown, Tennessee. And just browsing in it, it seems to be a very superior work. And yet very few Christian will read such books and citing Burkett again, he makes this statement. “Most Christians in America are as much a part of the problem as anyone else.”

And it is because they do not want to come to grips with economics. Their attitude is, “Well, the Lord will take care of it,” just as the common attitude if anyone tries to tell people in Washington what is coming, “Well, when the time comes, we will do something about it.”

One expects God to bail us out of everything and the other expects Washington to bail us out of everything.

[ Scott ] Well, of course, that attitude is that God is their servant.

[ Rushdoony ] Yes.

[ Scott ] All they have to do is ask and he will... he will... he will obey. And the government is a servant and if you ask the government and it will obey. And in both cases you are dealing with your master. And the response may be not what the individual expects.

[ Rushdoony ] Yes.

[ Scott ] But I would say this. I would say that if we are definitely going in and nobody knows the time. We are going into this crunch. Apparently by the middle of the decade it will be very critical. We have an added problem here with our racial problem. No country has talked more about racial harmony and behaved more poorly in terms of race and relations than we have, mainly because of the mis directions of our professionals. But we cannot have a real crisis in this country without it becoming a racial crisis. And the only group that I know of who, outside of the Christian and the Christians need to be organized and they are not, that is even coming close to dealing with the basic issues is the Buchanan effort and Howie Philips.

[ Rushdoony ] Yes.

[ Scott ] And they are moving closer all the time to putting all these particular issues together, the social, the racial, the economic the governmental and the religious.

[ Murray ] Well, massive layoffs by our job sector is going not make these problems worse.

[ Scott ] Yes.

[ Murray ] Because it will be on a much greater percentage of blacks who will be out of work and the ones that have jobs and it is just going not make things tougher. When you have people that have been told by their leadership... have had this politics of guilt and envy instilled into them, things are going to get unpleasant.

[ Scott ] Especially because we will not have the funds to give them welfare the soft landing.

Now even to discuss this, though, is difficult because we are not given all the facts. All the facts are not available to us. For instance, the ... it was only the Wall Street Journal that pointed out that when 74,000 layoffs are announced by General Motors that all those men or women will get 95 percent of their salary for the next three years because of the union contracts. Now that is a big anchor on the head of Detroit competing with the Japanese, contrast which you have to pay a man not to work for three years. And in that same way there are many other facts in the present situation that we are not told about.

[ Murray ] I think the answer lies in the other side of this statement that you cited where he said that the problem is due to the America people wanting benefits from the public treasury. The answer to the problem is that it ... people’s thinking is going to have to change. They are going to have to be willing to change their attitudes so that they don’t take benefits from the public tradition and from government and start solving their own problems instead of demanding that government solve every problem all the way down the line.

[ Rushdoony ] Now you are pointing to what I think is the....

[ Scott ] The challenge.

[ Rushdoony ] ...the challenge and the beneficial aspect of what is coming.

[ Scott ] The opportunities...

[ Rushdoony ] The opportunities, because I believe God is getting our attention with this crisis.

[ Scott ] All right, well...

[ Rushdoony ] Like the old...

[ Scott ] ... so we get like a mule.

[ Rushdoony ] Yes. Hit us over the head with a plank like a mule, a two by four, rather, to get our attention. And God is definitely going to get our attention in the next few years. And I feel that by cleaning house on the old humanistic statist order, we are going to see a shift from the expectation of salvation from the state to a thoroughly godly perspective, looking to salvation from God and not from the capital.

[ Scott ] Well, one of the... one of the great idols that is crashing is the idea of perfect security inside the corporation.

[ Rushdoony ] Yes.

[ Scott ] Now the takeovers and so forth have pretty well demolished that, plus the fact that management has been engaged for the last 20 or so years in destroying the loyalty of the workers. They have ... the 20 ... 20 years in, 50 years old, you are either up or out. And premature retirements at one third your former pay which is not enough to keep you going and you have to find a new career, et cetera, et cetera. So the old landmarks are going. I see an expansion of contract labor where individuals will begin to contract with companies to sell their skill without being on the payroll, pay their own taxes, take care of their own health plans, somewhat as I do and so forth. And that alone is going to change the caliber of the country, because truck drivers can do this. Clerks can do this. Secretaries can do it. Everybody can become a temporary. Everybody can become a contract worker. The whole idea of the factory, the nine to five and so forth is going by the boards.

They are own talking about just having people do certain work and come in at any time and leave at any time that they finish the work.

[ Rushdoony ] The IRS is very upset about that.

[ Scott ] And, oh, I am so happy to hear that.

[ Rushdoony ] Yes. They take a dim view of contract labor.

[ Scott ] Yes. They take a dim view of self employment.

[ Rushdoony ] Yes.

[ Murray ] Well, we were discussing earlier about the... is it the demand for a national health plan. This is the perfect example of the extension of this whole epic of people demanding that the government solve a problem for them. If they force the politicians through public outcry to invoke a national health plan in this country, they are going, supposedly to exempt employers who have less than 30 employees. However, there is thousands and thousands of tens of thousands of employers with 30 employees or more who will simply either leave the country, they will go out of business or they will go to a ... strictly a contact labor basis. So it is the government themselves that this forcing this inevitable result that the IRS doesn't like, be.. because it is more difficult to administrate that way.

[ Rushdoony ] There was a poet in the 30s whose name I now cannot recall, but I knew his poem for a long time by heart, because he saw the Depression as the beginning of the end of the old order. And the poem began with these words. “The false gods go...” He was premature. The false gods got a leaf... a lease on life with the whole post war inflation.

[ Scott ] Well they institutionalized all America.

[ Rushdoony ] Yes.

[ Scott ] Period. This is what is breaking up.

[ Rushdoony ] Yes. But now the false gods are beginning to collapse. And I think it is the greatest opportunity for Christianity in several hundred years since the reformation and the counter reformation.

[ Scott ] Well, this is a chance.

[ Rushdoony ] Yes.

[ Scott ] This is... this is the beginning of... of the second Reformation.

[ Rushdoony ] Yes.

[ Scott ] Because we ... we have got the means now to out flank the press, to reach the people. What we need is the clergy that will tune in on what is happening around.

[ Rushdoony ] Yes.

[ Scott ] Around them.

[ Rushdoony ] I think our manifesto, as it were, that the five of us wrote The Great Christian Revolution is very important in calling attention to the basic issues that we face.

[ Murray ] There are some other things that Burkett points out in his book that I think are interesting. For over 100 years the US Constitution made it illegal to transfer wealth until the New Deal administration came in...

[ Rushdoony ] Yes.

[ Murray ] Then people got this idea that the federal government as going to solve everything. And now the U S Government has become the resource of last resort. If Chrysler goes ... gets in trouble, if Lockheed gets in trouble, if any government program gets in trouble, if the savings and loan industry or the banks get in trouble it is always the tax payer that is going to bail him out. And one other number that people, I don’t think realize, because they are not told the truth about the cost of government programs, that they demand that their leaders invoke upon them, they have these unfunded liabilities which are the off budget items.

[ Rushdoony ] Yes.

[ Murray ] And people don't realize how much it would cost in taxes to fully fund those programs. So it is sort of ... they see it as a something for nothing type of thing because they don't’ see the bill as coming due any time soon. But they are stealing from their... from their children and their grandchildren.

[ Rushdoony ] The off budget deficit is five times greater, some estimate, than the on budget deficit.

[ Murray ] Well, we just... just... just one number, for instance, the welfare program. In the 60s when the Great Society came along it cost 60 billion dollars. In 1990 welfare programs total about 260 billion dollars and, you know, what have they purchased with it?

[ Scott ] Well, they have purchased the collapse of the physical structure known as the country, the bridges.

[ Murray ] The infrastructure.

[ Scott ] The docks. The sewers. The water treatment facilities.

[ Murray ] Transportation.

[ Scott ] For everything. Everything is ... while they have... and this... this misplaced benevolence. However the benevolence is now coming to a close. In Detroit, for instance, or rather in Michigan they have knocked all the able bodied single people off the welfare rolls, 90,000 of them, 90,000. But it turns out that they didn’t really knock them off entirely, because they still get free medical attention. And they get various and sundry other things.

On the other hand Pat Buchanan has pointed out the paradox of sending relief money and goods overseas when we have people sleeping in the streets in this country.

[ Murray ] Well, the ... the Democrats seem to feel that all you have to do is to raise taxes to solve this problem.

[ Scott ] Well, they always call it soak the rich.

[ Murray ] Yeah, but for every dollar in taxes that... that the government collects it is currently spending a dollar and 82 cents. And you just can’t keep doing that forever.

[ Scott ] Say that again.

[ Murray ] For every dollar in taxes that the federal government currently collects, it spends a dollar and 82 cents.

[ Scott ] To collect the dollar.

[ Murray ] No.

[ Rushdoony ] No, no.

[ Murray ] No they spend in programs.

[ Scott ] Oh, they spend ... they spend a dollar 82 of every new dollar they get.

[ Rushdoony ] And the more they collect the more they spend.

[ Scott ] Well, who knows. Maybe we will have to kill a few congressmen.

[ Murray ] Well, the...

[ Rushdoony ] Well, the interesting thing is that Welfarism in Europe is creating slums in cities that were beautiful, stone structures.

[ Scott ] Same as here.

[ Rushdoony ] ... have no slum areas.

[ Scott ] Yes. Same as here.

[ Rushdoony ] Yes. Harlem, as some have said, is the architectural gem of New York, if it could be restored.

[ Scott ] Well, those were the brownstones.

[ Rushdoony ] Yes.

[ Scott ] And that was where the wealthy and the Horatio Alger’s time, remember? He used to...

[ Rushdoony ] [ affirmative response ]

[ Scott ] ... in his little dark... little books, those dime novels always talking about the man who lived in a brownstone.

[ Rushdoony ] So what entitlements do, first of all, is to destroy the people who receive them. then they proceed to destroy the community and the country.

[ Scott ] Well, the Roman mobs relied upon the baths and the food and the food was rationed. In... in the... by the Justinian’s time the rations were so finely drawn that there was a difference between an able bodied man and an old man or a child or a woman or an elderly person and so forth. As each... the rations were tailored to your capacity. And public officials were appointed, not elected, because nobody wanted to be a public official. The... the responsibility was too onerous and it was too dangerous. The people killed themselves before the tax collector came by and in that... in that context I would like to point out that there have been an incredible number of suicides, both male and female among the farm population of the United States in the last several years.

[ Murray ] Did you hear Ann Ruden’s Mirror, Sacramento Mirror, Anne Ruden’s answer to the question when she was asked what she is going to after she leaves office? She says, “I am going to look for some kind of a job where I can still serve the public interest and I don’t have to wear a bullet proof vest.”

[ Scott ] That is interesting.

[ Rushdoony ] Yes. In one of the saner cities of the West...

[ Scott ] In Sacramento.

[ Rushdoony ] Yes.

[ Murray ] Well, I think some of the ... you know, at the end of Burkett’s book he has some suggestions for Christians or anyone else to try to position themselves so that they don’t have to go through the worst gut wrenching scenario. And the number one suggestion that he has is to eliminate personal debt to the greatest extent possible, particularly anything that you have to... that are items that depreciate rapidly, automobiles, that sort of thing.

[ Rushdoony ] I am glad you brought that up, because a great many people try to profit from inflation when they see runaway inflation coming. And years ago a German told me that as it became apparent to some smart people after World War I that Germany was going to go into inflation, they bought a great many things, properties, businesses, farms, expecting to pay it of with worthless money. But what they didn’t realize is that the inflation wasn’t the straight upward climb. It had its zigs and zags on the way up. And you could be caught in one of these zig zags and wiped out.

[ Murray ] Well....

[ Rushdoony ] On top of that a lot of people didn’t calculate on the enormous taxes they were going to pay on these properties before it was over. And they had bought and paid for things and then been wiped out by the taxation.

[ Scott ] Taxation and also there was the fact that in German the... the government allowed the banks to change the terms.

[ Rushdoony ] Yes.

[ Scott ] So that in the end you did not benefit, but the bank did.

[ Rushdoony ] Yes.

[ Murray ] Well, a lot of people today the current market value of their home is less than what they owe on it.

[ Rushdoony ] Yes.

[ Murray ] And if they can’t make the payments and the bank forecloses they still have to pay the difference.

[ Scott ] Yes.

[ Murray ] And this will happen if there is depression. People are thrown out of work. Burkett said that during the Depression of the 30s that roughly 22... 20 percent of the people were out of work and he estimates that during this coming depression that between 30 and 35 percent, one third of the work force of this country will have no income.

And all of those people are middle class and a very large percentage of them have money invested in a home. The other warning that he has is: Do not borrow money on home equity.

[ Rushdoony ] Yes.

[ Murray ] This is very popular right now, you know, for a... to get ... try to stimulate the economy the government has tried to get banks all the advertising that you hear on radio and so forth that is to borrow money against your home equity for what is essentially luxury items. You know, put in a spa or a pool or that sort of thing. Well, those... those won’t feed you when the crunch comes.

[ Scott ] Well, it is... it is a second mortgage.

[ Rushdoony ] Well, our time is virtually up. I would like to stress again that this crisis is a very real one. Christians must take it seriously. They must get out of debt. And they must recognize that in the providence of God it is the greatest opportunity of centuries because it means the destruction of the humanistic statist world order.

Bush may talk about a new world order, but his idea is a doomed one. Either we Christians provide that new world order or we will have truly a dark age.

[ Scott ] Oh, I think Christians will have to network.

[ Rushdoony ] Yes.

[ Scott ] Church groups in particular should be a network. This should be the nucleus of a network.

[ Rushdoony ] Yes. Well, Douglas, do you have a last word or two?

[ Murray ] Well, I think that survival information is contained in the Bible. One of the ... one of the bits of wisdom from Solomon is don’t... essentially don’t put all your eggs in one basket. Divide your portion into seven or even eight parts. In other words, diversify. So make a list.

[ Rushdoony ] Yes. Very good. Well, thank you all for listening and God give you wisdom as you prepare for the future.

[ Voice ] Authorized by the Chalcedon Foundation. Archived by the Mount Olive Tape Library. Digitized by ChristRules.com.