8. Manna from Heaven?

If you think health care is expensive now, wait until it’s free.

- P.J. O’Rourke

If wishes were horses, beggars would ride.

-Proverb

THE NOTION THAT ONE man’s need is another man’s obligation has become so engrained in people’s minds that revolutions, riots, and demonstrations erupt almost weekly around the world. People routinely blame their political leaders for not providing them better lifestyles. Many believe that the State can miraculously provide prosperity for everyone simply by creating and distributing wealth. People see the State as the source of a “free lunch”—manna from heaven. Not surprisingly, nearly every prospective political leader reinforces this “free lunch.” Political candidates tempt voters with an assortment of freebies, and then, when elected, add those offerings to all those freebies already on the table.

As P.J. O’Rourke quips above, the most expensive lunch is a free one. In the real world, someone must work to provide and pay for all the free benefits that others receive—and that “someone” isn’t the State. States only provide what they acquire by directly taxing those who are hard at work producing real goods, and indirectly taxing everyone—including retirees—by issuing fiat money.⁶ States can also use borrowed money, but doing so only increases the State’s future dependency on direct and indirect taxes to repay those lenders. The degree and amount of such manipulation and skullduggery boggle the mind. It is virtually impossible for anyone to calculate the actual dollar cost of all these “free lunches.” The greatest travesty, however, is not the up-front taxes, but rather the detrimental impact on the recipients of the free lunches. These are the very people we intend to help, but who are instead enticed into a dependency trap.

⁶Fiat refers to making something so by decree—in this case, money. Governments create fiat money by printing currency and by issuing bank credit.