{"id":571484,"date":"2010-05-20T06:45:26","date_gmt":"2010-05-20T10:45:26","guid":{"rendered":"http:\/\/www.prisonplanet.com\/?p=43463"},"modified":"2010-05-20T06:45:26","modified_gmt":"2010-05-20T10:45:26","slug":"paul-krugman%e2%80%99s-welfare-state-fallacies","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/571484","title":{"rendered":"Paul Krugman\u2019s Welfare-State Fallacies"},"content":{"rendered":"

Via Prison Planet.com \u00bb Commentary<\/p>\n

Jacob Hornberger
\nCampaign For Liberty<\/a>
\nThursday, May 20th, 2010<\/p>\n

A recent op-ed entitled \u201cWe\u2019re Not Greece\u201d <\/a>by Paul Krugman in the New York Times encapsulates everything that is wrong with liberals when it comes to economics.<\/p>\n

The good liberal that he is, Krugman suggests that the welfare state is about \u201ctaking care of those in need.\u201d<\/p>\n

What he misses, however, is the issue of means, which, not surprisingly, he totally fails to address in his op-ed.<\/p>\n

Suppose I accost you with a loaded gun and force you to take me to an ATM. I tell you to withdraw $5,000 or I\u2019ll shoot you. You withdraw the money and give it to me. I go and give all the money to people in need. I don\u2019t keep one dime for myself.<\/p>\n

Haven\u2019t I taken care of people in need? Isn\u2019t what I did moral? Isn\u2019t it consistent with God\u2019s will? Aren\u2019t I a good person?<\/p>\n

No. I\u2019m nothing more than a common thief. The fact that I\u2019ve used the money to help the needy is irrelevant. The end doesn\u2019t justify the means. I should be prosecuted and convicted.<\/p>\n

Presumably Krugman would agree. But his moral blind spot \u2014 indeed, the moral blind spot that afflicts all liberals \u2014 is his inability to see that the same principle applies to the coercive apparatus of the welfare state. Who are the compassionate, caring people in a welfare state? All the citizens of the nation? Only the taxpayers? How about the IRS officials, especially those who harass and persecute people into paying their taxes? What about the welfare bureaucrats who distribute the dole to people? What about the congressmen, who claim credit for the federal money they bring back to their district? What about tax protestors, who don\u2019t pay any income taxes? How about illegal immigrants who have taxes withheld from their pay?<\/p>\n

The real answer is: None of the above. Why? Because the entire welfare-state system is founded on force, which is antithetical to moral values, compassion, and free will. The only help for the needy that matters is that which comes from the willing heart of an individual, not at the point of some bureaucrat\u2019s gun.<\/p>\n

Krugman laments the fact that the Greek government doesn\u2019t have control over its own money supply, like the United States does through the Federal Reserve. If it did have that control, Krugman says, it could begin stimulating the economy with inflation \u2014 that is, by printing the money to pay off that ever-increasing mountain of debt.<\/p>\n

What he misses, however, is not only the moral implications involved with inflationary liquidation of debt but also the fact that inflation never accomplishes anything constructive in the long term. Let\u2019s not forget, after all, that the principal reason the Framers established a gold standard was to prevent the federal government from inflating the money supply. By manipulating money and prices, inflation produces distortions and perversions by sending bad signals to the private sector. Ultimately, those distortions and perversions become manifest, which causes things to go into a tailspin. Thus, while inflation can delay the day of reckoning, that\u2019s all it can do.<\/p>\n

The day of reckoning has obviously come for Greece and other European welfare states. For decades, such regimes been spending money on the dole that they didn\u2019t have. To keep the dole payments going to Greek citizens, officials went out and borrowed money to their heart\u2019s content and then lied about it to the other Euro countries. Ultimately, people figured out what was going on, and the jig was up.<\/p>\n

Not surprisingly, despite facing national bankruptcy the Greek people refuse to let go of their dole system. That\u2019s what the dole does to people \u2014 it creates a sense of hopeless dependency and also a sense of entitlement. Young Greeks are also protesting, because they feel their future life on the dole is now threatened.<\/p>\n

Rather than dismantling their dole system, which is what they should do, the Greeks have induced foreign taxpayers to underwrite their dole, including German and American taxpayers. That\u2019s what the U.S. Federal Reserve has committed Americans to do, without even the semblance of congressional approval.<\/p>\n

But despite a massive Greek bailout, speculators aren\u2019t buying it. They\u2019re continuing to send the value of the Euro into the tank. They\u2019re not buying it because they know that the Greeks have no intention of doing what is necessary to save themselves \u2014 dismantle their dole system. At most, they\u2019ll reform it by reducing welfare spending a bit \u2026 and by raising taxes \u2014 the very things that Krugman recommends that U.S. officials do to address the worsening welfare-warfare spending and debt problems facing our country.<\/p>\n

Krugman and the Greek statists recommend raising taxes as part of a welfare-state reform plan. But the problem is that the more they raise taxes, the more they send marginal firms \u2014 that is, firms that are barely making it \u2014 into closing down operations, which in turn increases unemployment, which then sends more people into the dole system.<\/p>\n

Moreover, as people learn about the benefits of going on the dole, more and more of them look for ways to do it themselves. Why work when the government will pay you for not working? The number of people on the dole \u2014 and the amount of the dole \u2014 skyrockets while the number of people producing wealth \u2014 and the amount of such wealth \u2014 diminish.<\/p>\n

Krugman acknowledges that Americans do have a \u201cserious long-run budget problem,\u201d but he says that America\u2019s \u201cfiscal outlook over the next few years isn\u2019t bad\u201d and certainly not as bad as Greece\u2019s. He\u2019s hoping that inflation will nurse the economy back to health so that there will be more private-sector producers paying the taxes to fund the parasitic welfare-warfare-state sector.<\/p>\n

Meanwhile, the U.S. government continues to spend and borrow as if there were no tomorrow, both on its welfare state (including the recent bailout of Greece) and its warfare state (e.g., Iraq and Afghanistan). For decades, Krugman and others of his liberal ilk, together with conservatives, have taken our nation down the road to Greece and the Roman Empire, with their out of control federal spending, taxes, inflation, moral debauchery, socialism, interventionism, and imperialism. Today, the welfare-warfare-state chickens are coming home to roost.<\/p>\n

There is only one solution to what they have wrought \u2014 a total dismantling of all their statism, both foreign and domestic. Tinkering will only delay the inevitable. It\u2019s time for economic liberty, free markets, and a constitutional republic for our land.<\/p>\n

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