Something for Nothing?
When government strings cheapen money

Many of us who receive money from Social Security or other government programs are learning the hard way the difference between money with strings and money without strings. For example, Social Security recipients have to be enrolled in Medicare, whether they want to be or not. “Universal” coverage means compulsory coverage, just with prettier political spin.

Those who are complaining about how hard it is to understand the new Medicare coverage seem not to realize that no government program voted into law by more than 500 members of Congress is going to be simple.

People who think that they are getting something for nothing, by having government provide what they would otherwise have to buy in the private market, are not only kidding themselves by ignoring the taxes that government has to take from them in order to give them the appearance of something for nothing. They are also ignoring the strings that are going to be attached to their own money when it comes back to them in government benefits.

That is not even counting the fact that government programs are usually less efficient than similar services provided by private enterprises.

Yet the illusion of something for nothing has kept the welfare state going – and expanding. If there is something for sale in the marketplace for $10 and you would not pay more than $5 for it, some politician can always offer to get it for you free – as a newly discovered “basic right,” or at least at a “reasonable” or “affordable” price.

Suppose that the “reasonable” or “affordable” price is $3. How do you suppose the government can produce something for $3 that private industry cannot produce for less than $10? Greater efficiency in government?

The fact that you pay only $3 at the cash register means nothing. If it costs the government $12 to produce and distribute what you are getting for $3, then the government is going to have to get another $9 in taxes to cover the difference. One way or another, you are going to end up paying $12 for something you were unwilling to buy for $10 or even $6. But so long as you think you are getting something for nothing, the welfare state can continue to expand.

The illusion that Social Security can provide pensions more cheaply than a private annuity or other retirement plan is the grand something-for-nothing political triumph.


Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University
editorial@lanereport.com

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