American Socialism (4)

A government that confines itself to the purchase of public goods and services, such as defense, policing, roads, education, the gathering of statistics and a bit of modest - and very careful - regulation of economic activities, along with support for basic research and exploration, will not consume very much of the national wealth. That is the sort of minimum level of government which, were we thinking about the good of our nation rather than seeking maximum personal advantage from government programs, we should all desire and support.

Unfortunately, regardless of the label attached to the party in power, we have an ever growing socialist government and we have had one since Franklin D. Roosevelt became President more than seventy five years ago.

A major characteristic of a socialist government - second only to the ownership of the means of production and distribution - is the confiscation of wealth from one or more groups that are currently out of favor in order to reward other groups that are temporarily in favor or are able to wield significant political power.

The most egregious current examples are:

• an $8,000 refundable tax credit payable to first time home buyers
• a $1,500 tax credit to those who decide to upgrade the windows in their home
• an additional trade in allowance of $4,500 to persuade owners of semi-ancient low gas mileage vehicles to buy new cars that have better fuel economy.

The potential benefit to a person that falls into all three of these favored groups is $14,000 which is about as much as the gross (before deductions) annual earnings of a full-time employee being paid the minimum wage. Mercifully the so-called "cash for clunkers" program has ended at a cost of only (only?) $3 billion. The other two are scheduled to end before the year is out but interest groups are gearing up to get them extended.

It is possible to make a reasonable argument that there are benefits to society resulting from government run welfare programs such a Social Security, Medicare, Medicaid, and Unemployment Insurance since they are designed to alleviate the effects of poverty and other extreme financial hardships. Even though we might well be better off without them, the economic disruption that would most likely result is a strong argument against abolition. That reforms are needed, and should be undertaken with great urgency, goes without saying.

On the other hand, it is almost impossible to justify - at least while keeping a straight face - large cash subsidies to persons who are financially able to purchase a house, a new car, or to undertake major renovations to their homes. Nor does it make sense that housing costs should be subsidized in the form of tax relief on interest payments because buyers chose to take out a mortgage on the property. (More on that another time)

Some of us who pay our taxes, and do not have our snouts buried in the public trough, are becoming weary of this never ending pocket picking. Unfortunately, we are still too few to influence the crooks and charlatans who occupy the Congress and the State Legislatures.

Frederic Bastiat, a French Economist who lived from1801 to 1850, described our current government almost perfectly: "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else."

Those who receive largesse from the government, and are under the erroneous impression that they are the recipients of "free money", should be very aware of this remark made by Thomas Jefferson: "A government big enough to give you everything you want, is strong enough to take everything you have."

Socialism generates its support from the mistaken belief that there is actually such a thing as a free lunch. It consists of a superficially appealing set of ideas that, however, can never survive in the long term. Unfortunately, its collapse is always very painful even though the subsequent long term benefits are many.

Some one hundred years ago, George Bernard Shaw accurately described the current political dynamic: "A government which robs Peter to pay Paul can always depend on the support of Paul." Given that there are many more 'Pauls' than 'Peters', and given that our form of socialism is not quite as fragile as the version practiced in the Soviet Empire, we are likely to spend at least another decade - or more - before the collapse of the current paradigm.

Although circumstances will be painful, we will then, if we have the courage, have an opportunity to rebuild an America of self reliant, hard working and unselfish people that would be recognizable to those who came so far, in such hard and dangerous circumstances, to found our nation.