The American tradition, far back to the pilgrims, was functional and sound. “A penny saved is a penny earned”, “make your own way”, “pay bills on time“, “neither a lender or a borrower be”, “the man who would not work should not eat”. The country thrived on this mutual economic comity. If Joe Smith built a house for his family, it was his family’s house….no one else had a claim on it. If he would step outside and kill a turkey for supper it was his….no one could claim half his turkey. After the harvest, no one could come and claim a portion of his harvest. Dreams and rewards of private property were the lubricants that powered the country. Danish and Greeks, Chinese, and Venezuelans, Irish and Africans came. Lubricant that empowered a dynamic, noisy, gritty society. You make your bed, you sleep in it. Roads, bridges, railroads, libraries, hospitals –generally acknowledged public goods- were built with private monies willingly given; sometimes with and sometimes without an expectation of a return on the investment. -Public goods are non-rivalrous in consumption and non-exclusive in distribution; everything else is private goods-. Between 1900 and 1907, combined federal and state taxes for public works projects, mostly falling on the very wealthy, rose as high as 6.7% per year. But with the taming of the west, urbanization, the diminution of farming communities, and several wars, permanent governmental structures had taken root. By the end of WWII, victorious Americans were rendering 16% of their income to a preening federal government which, changing its focus away from war, hurried to obliterate the critical distinction between public and private goods by mis-applying a feel good phrase in the constitution: “promote the general welfare”. Suddenly, every American was responsible for everybody’s home, every American was responsible for everybody’s education, every American was responsible for everybody’s health, etc. In addition, Economics 101 predicts that the more you subsidize something, the more of it you get. So the war on poverty turned out to be a 60-year-long $20 trillion subsidy…… of poverty. So today we have more poverty than in 1952, even though in 2014, we spent more on taxes than on housing, food, and clothing combined. It is the nameless architects of the endless list of government programs that have consistently showcased their ignorance and/or willful trampling of a simple economic construct: the difference between public and private good.
Posted on: Mon, 26 Jan 2015 02:46:15 +0000
Trending Topics
Recently Viewed Topics
© 2015