Benjamin Franklin said that: “When the people find that they can vote themselves money that will herald the end of the republic.” How prescient and true. Once theft and redistribution by government is considered acceptable, the downward spiral of civilization begins. It can last for decades, or even centuries. But the end result is always bankruptcy as countless factions ruthlessly fight with one another to be on the receiving end of the heist. When theft by government is no longer considered acceptable, the upward march of civilization resumes.
Hello, everybody, and thank you for tuning in to the Liberty Report.
With me today is Chris Rossini, our co-host.
Chris, welcome to the program.
Good morning.
Great to be with you again, Dr. Paul.
Very good.
I'd like to talk today about who ends up paying for all the free stuff.
Because in politics today, we hear a lot of people.
There are more people in Congress right now that talk about more free stuff for everybody.
And they, I guess, have been successful and they can win elections doing this.
But one thing that they never answer, occasionally they're asked the question, but you never hear a clear-cut answer.
Who pays for this?
How do they do this?
And it's not just one little thing.
It's perpetual.
It's guaranteed incomes and medical care, the whole work.
But they never say who pays for it.
You know, it reminds me of a statement that was made many years ago and still used.
There's no such thing as a free lunch.
And that is true, except there is somebody that's going to pay.
Some people get it and think they're having the benefit and they think it's for free.
But the irony is, as we'll try to make our case for it, is that even those who are getting the free stuff end up paying for it in the end.
But somebody has to pay.
Somebody has to suffer the consequence.
It's never a zero-sum game that everybody's happy about this.
It doesn't work like the marketplace.
You know, the famous journalist, Austrian economist, Henry Hazlitt, had a pamphlet out of booklet.
It was called Instead of What?
He spends his time making a point that, you know, if you spend money or give money and make something look free, what would have happened if that money would have been distributed in the marketplace?
Individuals spent the money, not the government delivering free goods and services to somebody.
And he explains that it would be a more productive use of that money and resources.
But that question isn't asked too often either.
But that's an important reason why things are distorted and why early on and when you're selling this bill of goods of free stuff, sure, it sounds good.
And depending on the environment, how many people are going to take it?
I guess there is a temptation of human nature.
You know, it's pretty hard to turn down free stuff, but somebody makes a living out of giving stuff away for free and hiding the fact of who gets to pay for this.
So, Chris, what do you think about this free stuff?
Have you gotten any of it for yourself lately?
No, I do not.
I don't participate in it.
But it's really exploiting human nature because all of us, we want things all day long, every day, and we want it right away and with as little effort and labor as possible.
The question is, how are you going to get all the things that you want?
Are you going to get it the peaceful, voluntary way with others or the violent and involuntary way?
And that's the area of expertise for the government.
Now, you can get something for free.
It's called charity.
If somebody voluntarily gives you something, that's, you know, you could consider that as free.
But government is fake charity.
They steal from one person and then give it to another and then claim that it's and Mary Rothbard wants me to quip about it that anybody could be conspicuously compassionate if somebody else is paying the cost of it.
And that's what we have.
Anything from government is not free.
It's stolen goods that is wrapped in the word free.
Right.
And, you know, when this question is asked in the political arena today, sometimes it's said that, oh, we'll just tax the rich.
We're going to put the taxes on the rich, and that's how we're going to redistribute this income.
But, you know, if you think about that, the rich seem to do pretty well.
You know, even when there's tax reform to soak the rich, and everybody would say that they would like to be able to do it, but it's not quite so simple.
Besides, all that free stuff couldn't be paid for by only taking it from the rich and the successful people.
If you took it from the people who were living off the government with special deals, that's different.
But if you take it away from a productive society, then there is another cost that everybody suffers from.
But the taxes will not be the answer.
And that's what some of them talk about glibly.
So, what ends up mostly, most of the time, is the government will pay for it.
But then, who's the government?
Oh, well, they'll take care of it.
And there are even some of the candidates now saying they can print the money.
And it's so absurd to think that it's out in the open because that's exactly what they do.
And they print money and they sell bonds and they finance the debt.
They delay the payments.
But it's also, you know, is food for the Federal Reserve to manipulate.
And they do this.
And also, that then leads to the business cycle.
So, what happens during the business cycle?
Well, some of these people who are looking for stuff for free suffer the consequences.
No matter how much free stuff they have, they might all of a sudden middle-class people who may not have been taxed might suffer by losing their jobs and losing their houses and certainly higher prices.
So it's ironic, but some of these individuals who are demanding free stuff still have to spend some money and they may suffer the consequence of a greater inflation rate than the people that they theoretically took the money from.
So this is all a gimmick to try to fool the people into believing that there is such a thing as free stuff.
But it's good politics and it's running rampant right now.
But one thing for sure, it can't last.
If that were the case and we were able to maintain our standard of living by just printing money, and we're doing a pretty good job now because we're still issuing the reserve currency of the world.
If it really was a sound economic theory, Americans wouldn't have to work because we could just say everybody gets free stuff.
And everybody will just print a lot of money.
And there are some who advocate that.
And we'll let the Chinese and others keep buying our debt, which they have been doing.
But eventually that ends up backfiring.
Either they quit buying the debt or the debt gets monetized and then that causes the inflation and a business cycle which can't be handled.
And instead of free stuff for poor people, there's a lot more poor people and not much free stuff around to pass out.
That's right, Dr. Pond.
Earlier, you mentioned the great Henry Hazlitt, and I recommend everyone watching this to look up Henry Hazlitt, read everything that you could get your hands on, but especially economics in one lesson, because he really drills home, you know, the seen and the unseen.
What is not seen?
Now, I'm sure many of our viewers a few days ago wrote a nice big check to the federal government.
Well, what's never considered is what would you have done with that money if you didn't have to flush it away to Washington?
Could you have taken a vacation, bought a new car, maybe put some better food on your table or bought some gold?
None of that is ever considered.
It never enters anybody's mind.
What you could have done is, you know, you're not even supposed to think about it.
Instead, you write your check, all your labor that you work for, it gets flushed away.
You don't know what happens to it.
And what you see that happens, you disagree with.
And unfortunately, what could have been is gone as well.
You know, and a lot of times people don't realize that this redistribution of wealth by force, it has to diminish liberties.
And that is how they redistribute wealth and also, you know, contribute significantly toward the wealth maldistribution, because although it's designed to help the poor people and distribute wealth, the whole system of inflationism and all, you know, creates this problem of the discrepancy between wealth distribution.
Redistribution's Cost00:02:23
But a lot of people don't think about it, but force has to be used to provide many of these services.
And whether it's by price control.
I mean, if you're going to get free medical care, who's going to pay for it?
Well, they might not pay fair market value for it.
So if you look at it, doctors, you know, don't get paid fair value or the full cost of their medical care if they're taking only Medicaid.
And therefore, they are more or less intimidated by rules and regulations and pushed into these things and to provide this care.
But to solve some of those problems, what also follows is there will be shortages.
There will be an effort in the marketplace to put up prices if they're all forced to provide certain services for so many individuals.
And right now, another thing that should annoy a lot of people is there's a lot of people coming into this country, not through the legal means, and they're going to be recipients of all this free stuff.
And what is outrageous is some of them get moved up into the front of the line in front of the people, American citizens.
But, you know, those who think that it's so neat to have government taking care of us in medicine, you know, there was somebody the other day, one of those progressive politicians, they said, this is the only country in the world that doesn't guarantee medical care for everybody from cradle to grave.
Well, you know, guaranteeing it is one thing.
Getting it is another thing.
Yeah, there might be a lot of countries around the world.
I'll bet you if you look at the poorer countries, everybody has medical care, but the right, you know, they're guaranteed it, but they don't end up getting it is the whole problem.
If people are, you know, enthusiastic about the government distributing medical care, they ought to go visit the VA hospital.
I've worked there.
All the physicians generally go through VA hospitals.
And just think of all the controversy in recent years.
I don't hear so much in this past six months, a year.
But all the lines, waiting in lines and poor care and not services for the veterans that everybody agrees they should be taking care of.
But that is government distribution of medical care.
Government Control of Education00:02:39
And they're no better.
Just think of all the effort, unconstitutional effort of the federal government to run our schools and get everybody in this country deserves free education.
And nobody, unless you go to a private school or homeschooling out of desperation to get away from the government schools, go to a government school.
It doesn't cost a cent.
But there is a major cost for that.
Indirectly, taxes go up and ultimately, and now they're enticed to get it by student loans.
And now there's $1.2 trillion worth of debt.
Oh, but I got my education for free.
Everybody thinks it's for free, but quality goes down.
There is no doubt about it.
When that happens.
So the part that I think is more annoying is what happens to a government-run school system.
It's nothing more than an indoctrination.
That is why, by the time we finish 12 years, and most of our colleges now, they haven't learned anything about Henry Hazlitt and Austrian economics.
They've all been taught inflationism, Federal Reservism, welfarism.
And this is because we have a monopoly control of education.
The founders didn't give us a monopoly control of education from the federal level.
And that is a horrible situation on how to educate people.
And now we're starting to see the consequence of that.
You know, they say there's a lot of jobs out there, but our people aren't trained well enough.
Well, we need more people to come to our country because we don't train our people here well enough.
But that is a consequence of centralized monopoly control of our education system.
That doesn't mean that anybody that goes there doesn't make it.
I had to go through public education.
But overall, though, I was not introduced to the history that I believe is more authentic or the economics, especially.
I never heard of it in government schools.
So that is a cost that's hard to measure, but it is a cost.
So, Chris, it's some of these invisible costs that we don't see, the kind of thing that Henry Hazlitt points out that you don't see that are probably much more serious than just the dollar costs that we do have a little bit of ability to measure.
Yes, Dr. Paul, those are all great points.
And I'll finish up by saying that America was at one point a genuine land of the free, and there are still remnants of it left.
Pride in Self-Reliance00:03:09
But the ideas did take hold.
And you've given all these examples that big government is needed.
And if that's what people wanted, that's what they've got.
And this is it.
It's here.
Government has never been bigger.
And look at the results.
It's because, you know, the way that people go about getting the things that they want, it's not the peaceful and voluntary way when government is involved.
They're redistributors.
They take and then they give.
And with that kind of system, you get a free-for-all.
Everybody wants, and nobody wants to give.
So it's been worked, but the peaceful way is always there.
It's always an option that we can choose.
And there's really no reason to wait for everybody else to catch up.
You can do it individually, deal with people in a peaceful manner, voluntary, trade, and don't look to take from them just to get what you want.
Yes, and I want to mention something that's a little bit different than an economic cost that I think is important.
And this is a personal opinion.
And that is when you get stuff easily, if a kid gets it and he's a spoiled kid and you receive things, but you're never required to work hard and produce something.
I believe it leads to a sensation, a feeling of lack of self-esteem.
I am convinced that productivity, regardless of our ability, is key to people's satisfaction and happiness.
If they can produce something and to help and take care of themselves, there's more pride.
They lose this sense of pride for what they can do.
But once you have this wealth redistribution by force and by all these complicated government rules and regulation and destroying liberty and responsibility, I think people get pretty unhappy.
And I think this is more or less what's going on right now.
There's a lot of unhappiness.
There's class warfare going on.
There's wealth maldistribution.
In a free society, I think there would be a cancellation of this anger if everybody knew, you know what, this is what I did, this is what I was able to do.
And you say, well, everybody won't be able to do the same thing.
No, that is absolutely true.
But the responsibility is for each and every one to maximize their efforts, to do what they can.
And in a society that promises free stuff to everybody, believe me, you destroy that whole incentive.
So this is one reason, for a personal reason, I think that a free society and free markets is so beneficial because it develops a self-esteem, but it also gives us the maximum welfare for the middle class and the poor.
This is what they don't believe.
People believe you have to use force and inflation and debt and all these things to make it a fair world.
They are completely wrong on that.
We want justice under this system, but we want people to be rewarded for being able and willing to take care of themselves.
So that is a little difficult to measure, but on the economic laws and the rules and the consequences, much of what we have already talked about, very, very real.