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Saturday, December 25, 2010

Why Public Charity Doesn't Work And Will Bankrupt Us All

There is a sense, I suppose, that we are not really in danger, that politics is much the same as it has been and will be for a lot longer. Liberals act as if they can pass another package designed to help the poor and unemployed that they will have accomplished something, as if the very act of passage puts people to work and enriches the poor. They feel that if they take credit for it they can stay in power long enough to turn this nation into a socialist utopia.

There is no socialist utopia. All of the examples they have held up as socialist success are bankrupt. Raul Castro acknowledges that their heralded health care system is a disaster by refusing to let the Cuban public view "Sicko" the big lie promulgated by Michael Moore. Castro is afraid that the public will demand the type of health care the movie portrays and civil unrest may result. Recently Castro created a private sector in an attempt to save the state from bankruptcy. Why? What happened to cause all of this? Was it a private corporate plot that could do what even the CIA could not? No, it is because the billion dollar subsidies pumped into Cuba during the cold war have been discontinued by Russia, a nation more concerned with the reality of strengthening their position with China, North Korea and Venezuela.

None of these socialist nations work in the long run. What America has avoided for decades is proving a false formula for success. What little America has bought into the socialist dream is dragging down the economy right now, making it increasingly resistant to stimulus. There is one unequivocal fact that none of these socialist nations can get around. Government is overhead. It provides the necessities of business, i.e., infrastructure to move products; a sense of security so private funds don't have to be spent securing the routes of commerce, though they might do it better; emergency services to protect property and etc.  From there, the private sector is supposed to generate enough money to pay for those things through taxation. In an attempt to increase efficiency and keep valuable workers employed with their companies, employers have increased pay and benefits, even extending those benefits to the whole family to secure loyalty to the company. This is the successful formula. It has been proven successful time and time again. It is the one part of the nation that has saved the nation from bankruptcy in the past.

Where the nation has deviated from that formula, it has gone bankrupt. To the degree that this formula is no longer being followed is the degree to which the nation has become dysfunctional. People are emotional. They want to do good for the less fortunate. There is nothing wrong with that, but when it comes from government rather than private charity, it ultimately destroys the good it seeks to provide. It can be no other way, because it has to take that goodwill by force from another citizen and thereby destroy the "good" it wishes to do by using a "bad" method. Instead of creating incentives for private charity, it has destroyed charity and replaced it with resentment, both for the person who has had their funds raided to provide it and from the person who has had to submit himself to the government for aid. Rather than being thankful to the state, the recipient defends his shame with resentment and hostility. He is owed and the other, the source of the funds, has been robbed.

The more poverty the state subsidizes, the more poverty it creates. Unfortunately, ease of application is a direct multiplier of need. In other words, as it becomes easier to apply for free money, the more applicants it creates. It really is no more complicated than that and yet this is the most ignored fact in all of social programming.

At this point in time, we are at a tipping point. We have created too many dependents and not enough producers to make the payments. Only two things can happen from here: 1) dependents can be removed from the dependency category and forced into the producer category; 2) the amount of producers are reduced to a point where none of the promises to the dependent class can be met. The difference between now and all of the times before is simple, we (the United States and perhaps the world) can no longer borrow enough money to delay the inevitable social upheaval. The fact that we have always been able to borrow ourselves past the tipping point before has left society in the unenviable position of not having the will to do the first, which will result in the second.

Cross-posted at WASHINGTON REBEL and TL In Exile.

3 comments:

  1. "Public Charity" doesn't work because it lacks what private charity has, which is a sense or morality. Private charitable organizations will try to help people get back on their feet so they can take care of themselves, while public "charity" just throws money at the recipients without doing *anything* to help them better themselves. All it creates is a class of society that are permanently on the public dole because they have ZERO incentive to get off it. It's (literally) bred several generations of government dependent voters who have no reason to change themselves, or change the system.

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  2. Exactly, Jim. It is the "now what" that we need to answer for the government. They have not the ability to deal with this fact.

    Thanks Brock.

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