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Sunday, January 03, 2010

Socialism's Greatest Lie: Government Can Give You Everything for Free

Socialism's greatest lie is that it promises the people something for nothing, services and programs of all kind that will either be "free" or more affordable than the free market variety. But just like the ads promising you a free iPod or a chance to make millions from home while you yawn, socialism is not something for nothing, instead more often it's nothing for something.


The idea that the government will take care of you is appealing, entire nanny states have been built on that proposition. But the government can't take care of you, it can't even pay its own bills without you. It can't run a television station, a toll bridge or even an off track betting service, or any venture that in private hands would be profitable, without using taxpayer funds to prop it up.

A legitimate enterprise never needs to fool its customers into thinking that they will receive something for nothing. It is only the scammers that need to do that. What a promise of something for nothing really indicates is a venture that is run by people who are incapable of hard work, who get by on tricking others out of their hard earned money. And that in short is what socialism looks like, with its monolithic bureaucracies where incompetence is the order of the day, its offices upon offices that never need to produce their results or show their books, and its embedded corruption that insures the money never goes where you think it does.

The promise of free health care though is far more devilish than a free iPod, because it doesn't simply promise people a gadget, but promises that the government will keep them alive. And because government free offers not only tend to cost a lot, but have a way of being universal and with no opt-out clause available, they're a scam in which participation is not optional to individual foolishness, but mandatory to everyone.

Free or cheap health care of course is appealing, but there is no such thing as "free" or "cheap" because everything the government does is paid for twice over. Everything you get from the government you pay for, either directly through taxes and fees, or indirectly through rising costs and black market prices. Taxes of course are the most obvious way in which you wind up paying more for the same services that the government provides you with.

Taxes are a fool's credit card, in which he spends and spends without thinking about the cost, until suddenly the bill comes due, and he simultaneously agonizes over the cost without connecting it to all the spending. Those who supported Obama and his proposals, without realizing their cost while complaining about their taxes are paying with a fool's credit card at the ballot box, incapable of even understanding what the bill means when it comes due.

But politicians are generally smart enough to assure voters that they won't be paying for the program directly. No, they assure us, the rich will pay for it. Big business will pay for it. Or we'll just borrow more money instead of raising taxes. If the regular fool's credit card is Visa, this indirect form of payment is Washington D.C., Idiot's American Express card. Because paying indirectly just adds a few layers of expenses between the taxpayer and the bill.

Raising taxes on big business and "the rich" is popular, but big business and the upper income tax bracket will ultimately pass down the cost to consumers in the form of high prices on goods and services, in the form of job cuts and outsourcing. Socialism's trickle down poverty approach insures that taxing the rich will still tax the poor and the lower middle class, it will just do so indirectly.

Less available products and jobs don't come with a tax bill. The tax is an invisible one in which depressing business, trickles down to the lower and middle classes who end up with fewer and more expensive product and service choices and fewer job opportunities. To balance this out, governments will begin offering tax breaks to businesses, and since something has to give, taxpayers end up footing the bill for business tax breaks impelled by business tax hikes. Governments find this convenient as the route between the government and program and higher individual taxes has become too indirect for most people to realize why their taxes are going up, and because this allows politicians to claim credit for saving jobs and benefiting from the donations sent their way by business lobbyists.

It would have been cheaper and simpler for individual taxpayers to see a direct tax hike, instead of the complicated way in which the government moves around money, while the politicians still benefit from covering every angle for a problem that they created.

And then of course there's the loan package. If you don't want to raise taxes on anyone, you have to borrow money, which is the Lunatic's MasterCard, because while taxes remain the same, the amount of debt being carried rises, and that debt has to be paid off. So instead of actually paying for a government service through higher taxes, the public takes on a huge load of debt, whose rising interest rates are far more expensive than direct taxation would be. But politicians don't care since they can keep passing the fiscal football until they're out of office. At which point the next set of politicians look at the debt figures and their own polls, and keep on doing the same thing, until the entire public has been reduced to a sharecropper society, working to pay off a debt to foreign lenders. A debt that they can never pay off because politicians keep borrowing more money to cover the cost of a constantly expanding government and a population that keeps consuming more government services.


But directly or in-directly, in any of these ways, the free or cheap government program quickly turns out to be mind-blowingly expensive. And there is a simple reason for that, because while government is officially non-profit, which seemingly suggests that by cutting out the profit motive, the government would be able to offer the same services at lower cost-- the joker in the deck is that government programs are administered much less efficiently than their free market equivalents.

While free market companies have to be efficient because profit motive requires cutting expenses, government programs don't have to be efficient, they just have to "be". A corporation has to increase the value provided to its customers and shareholders to remain competitive. The best way to do that is by cutting expenses. By contrast government programs don't have to increase the value provided to customers, as they are non-competitive, and while the public may be government's unofficial shareholders, the politicians insulated them from the actual bureaucrats who run the programs. And the bureaucrats are the "expenses", which allows them to save themselves from ever being cut.

And where free market businesses may cut staff first and customers second, health care unions along the lines of SEIU or the California Nurses Union insure that staff can never be cut without triggering a shutdown of all health services. By centralizing health services, health care unions gain a great deal of power that makes them effectively unstoppable. Jobs are padded and expanded. Unions win concessions at the expense of the people the government programs are provided for. That means teacher's unions gain, while schoolchildren lose out. Nursing unions gain, while patients lose out. In the balance between a union and a customer, the union always wins because it wields more clout and brings more money to the table. And that means there is no way to control staff expenses without a prolonged political battle.


Furthermore government programs are not actually non-profit, they just appear that way. A common argument made by socialized health care advocates is that the public should not be spending money on health care that will be used to fund some CEO's yacht. But the thing is that under government health care, the money is still being used to fund someone's yacht. It might be the yacht of top health care advisers who pull down six figure salaries, it might be the yacht of allied non-profit executives who frequently pull down six and seven figure salaries, it might the yacht of a health care union bigwig, or finally it might be the yacht of the CEO of a medical contractor who wins the chance to provide the government with surgical tubing, at twice the cost, thanks to some help from his buddy, Senator X or Congressman Y, whose campaign fund he just happened to donate to. But either way there way there's always a yacht. And you're always paying for it. The difference is that with the government there are a lot more yachts and you have no way to opt out of paying for them.

The profit motive in government programs frequently takes the form of corruption, with no bid contracts and sweetheart deals, jobs for the sons and daughters of the donors to Senator X and Congressman Y. Sure the program itself is non-profit, until you look at how much it cost to build that hospital vs how much it should have cost. It's non-profit until you look at that nice house that Company Z helped Senator X pick up in exchange for his off the record chat with the Chairman of the Department of Y that insured that Company Z got the contract, and the taxpayers got screwed.

This is not non-profit, it's a kleptocracy. And a kleptocracy is for profit, the profit is just under the table. The more government expands, the more the kleptocracy grows. Naturally the kleptocracy just loves the idea of expanding government programs. Why shouldn't it? Free market companies make money by selling products to consumers. The kleptocracy make money by exchanging government contracts for donations, favors and payoffs. Externally a kleptocracy may look like it's booming, but in reality it's rotten to the core, and nothing is done well anymore. Doing anything requires knowing a friend of a friend in the government. Because the only way to do business under a kleptocracy is to be part of it. Or be its victim.

The result of all this is that government services are actually fantastically more expensive than their free market counterparts, the way you pay for them however is often indirect, which makes them seem cheap or free. But like a credit card whose payments don't come due right away, it feels good to spend the money if you don't realize the connection between the bill and the money being spent.


Government health care means that you're actually paying twice for the same program. Once for the cost of the basic resources that make up the program, and once for all the government inflation of the actual cost of the program. The government cannot actually cut the basic costs of of the resources of the program, which may be the staff, the supplies, the facilities and the administration of the program. Government administration is more expensive than its free market counterparts. Government contractors that provide the supplies and facilities are invariably much more expensive, because of corruption. Government staffing tends to be a more expensive and lower quality operation dominated by unions and bureaucracy. 

Since the government cannot reduce the actual base costs of the resources, and in fact inflates them, the result is a more expensive government program. What it can do however is hide those costs directly in your taxes, in indirectly someone else's taxes or in the national debt, which will trickle down to you anyway but at a higher cost. Essentially this makes socialism into a three monte card game, in which whatever card you pick, you lose. The only question is how much you lose.

Nothing from the government is ever free. The only question is how much you lose.

11 comments:

Lemon said...

It's a mess and unfortunately most don't see that it is.

Native Oregon Hiker said...

You have hit the nail on the head in a way that the common layman can understand.

Daniel Greenfield @ the Sultan Knish blog said...

thank you, that was what I was hoping to accomplish

Keli Ata said...

Indeed. You have made it easy to understand.

Dave Coe said...

Hey Sultan, I saw your comment on Debbie Schlussels blog about Inrlogious Basterds. Why do you say that the Examiner.con is anti-semitic?

Daniel Greenfield @ the Sultan Knish blog said...

the examiner is not anti-semitic, this particular examiner article however was because it misrepresented a book and based itself on IHR or the Institute for Historical Review, a Holocaust denial organization run by and for neo-nazis and white supremacists.

Dave Coe said...

Ok, you are right that the IHR is anti-semitic but why would a mainstream newspaper employe an anti-semite. Do you know anything about the Journalist who wrote that article for examiner?

Daniel Greenfield @ the Sultan Knish blog said...

The Examiner is not a newspaper, it's an online user edited directory. Think Wikipedia, except it's not fact based and the writers can make money from traffic.

Keli Ata said...

I didn't read the Examiner article or see the comment. Sultan, did you think Inglorious Basterds was anti-semitic because it was fictional? Or did the journalist twist the fictional movie around?

Most people can obviously tell the film was fiction since in the movie Hitler, Himmler and other Nazis were killed in a French theatre.

Daniel Greenfield @ the Sultan Knish blog said...

I didn't think Inglorious Bastards was anti-semitic, I never even saw it.

The Examiner article that was anti-semitic just latches onto the movie as an opening to deliver a long neo-nazish rant about Der Joos. The whole thing is a spinoff from a discussion on another blog.

Anonymous said...

All Joos is terriors.

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