The New Year has started with a monstrosity of a budget deal, one that proves that neither political party, Democrats or Republicans, is really serious about controlling the growth of big government.

But soap opera dramatics about fiscal "cliffs" and sequestration shouldn’t deflect from where President Obama is really taking this country. Consider this story from the Wall Street Journal a few days before Christmas:
“Thousands of people in several Argentine cities ransacked supermarkets for a second day in the latest challenge to President Chistina Kirchner, who is struggling to revive a weak economy... In the central city Rosario, two people were killed during the incidents and 137 people arrested.

Washington's Republicans and Democrats alike have become the toll collectors on the road to serfdom.
“The violence puts Mrs. Kirchner in a difficult position as the poor are [her] core constituents...Her government spends billions of dollars a year to help low income families, including free health care... [Yet] Argentine activists who claim to represent the poor traditionally block access to supermarkets in the month of December to demand free food and other items...The latest events were some of the worst acts of looting and vandalism in years.... Local media showed dozens of men, women, and children hauling away televisions, refrigerators, and food.”

Some have said my warnings about a coming civil war between makers and takers are exaggerated. (Alan: Two people get killed in civil unrest and author Herman sees two days of supermarket ransacking as a template for the collapse of American civilization. Aquinas noted that sin is always accompanied by loss of proportion/perspective. Notably, it is the assiduous trashing of proportion/perspective to which American conservatives devote themselves.)  It’s true that Argentina’s politicians have been waging class warfare since Juan and Eva Peron–and they aren’t fazed when it turns bloody. Obama and the Democrats are relative newcomers to the game. But Argentina reveals who really suffers when those who create a nation’s wealth get mugged by those who spend it–as just happened this week in Washington.
It’s the poor and the middle class, the very ones big government says it’s trying to protect.

And sadly that’s where Mitt Romney had it wrong.

That 47 percent of Americans who get unemployment benefits, Social Security disability checks, Medicare and Medicaid, and government student loans, aren’t the real takers. Like the rioters in Rosario, they’re just pawns in a perennial battle between those who see wealth and prosperity as something created by hard work, ingenuity, and innovation in a free market system–or something to be doled out by government.

Experience teaches that those who believe in free markets are right. The November election and the budget deal, however, show that the other side is winning, and winning big.

Since 1970, America’s public sector has exploded as a percentage of GDP, rising to almost 25% last year. While the national unemployment rate hovers at the 8% mark, government worker unemployment rate is a cozy 3.8%. Sixteen percent of America’s workforce now work for government. By the time the Obama administration ends, we won’t be that far away from Argentina’s 21 percent.

Yet as an economic and social enterprise, government creates nothing.

Far from adding to people’s standard of living, government is the number one cause of poverty in this country. It forces those who depend on its largesse to live hand to mouth, with no time or money to plan for the future. They become unable to fend for themselves---and increasingly resentful of those who can.

When the economy tanks and the government checks have to shrink, their only alternative is to take to the streets. That’s what happening in Argentina, and in Greece; and that’s where the growth of government is taking us here, as this current budget deal increases handouts–and more and more Americans are finding that an unemployment or Social Security disability check is their only life line.

Washington’s Republicans and Democrats alike have become the toll collectors on the road to serfdom–and the road to Rosario.

How far down that road depends on how our private sector rallies in 2013 after two numbing defeats, first on November 7 and then on Capitol Hill this week.

It needs to explain to that 47 percent that when big government wins, we all lose–and that this nation won’t survive if it does.

Alan: "The Argentine economy recovered strongly from the 2001–02 crisis; its per capita income on a purchasing power basis was the highest in Latin America.[1] ... Argentina's economy grew by 9% in 2010, and officially, income poverty declined to 8% by 2011;[8] an alternative measurement conducted by CONICET found that income poverty declined to 22.6%.[91][92] Argentina's unemployment rate in the fourth quarter of 2011 was reportedly down to 6.7% from 8.4% in the fourth quarter of 2009, according to INDEC data. The jobless rate has declined from 25% in 2002 largely because of both growing global demand for Argentine commodities and strong growth in domestic activity.[93]  http://en.wikipedia.org/wiki/Economy_of_Argentina   (Alan: Argentina's unemployment is significantly lower than the U.S. rate.)

Historian Arthur Herman is the author of the just released "Freedom's Forge: How American Business Produced Victory in World War II " (Random House May 2012) and the Pulitzer Prize finalist book "Gandhi and Churchill: The Epic Rivalry That Destroyed an Empire and Forged Our Age " (Bantam, 2008).