I've got an idea!  Let's...

It was a great conversation involving several good friends.  Creative people with drive, skills, ambition and determination to serve God.  Some are involved in business, some homemaking, some in school.  Interesting projects were proposed, ways of disseminating truth through music and art, of pointing people to their need of God and to consider the question of their eternal destiny.  The ideas were laudable: all ultimately motivated by a desire to help people live better lives and experience peace, satisfaction and hope.

It struck me.  "What do all these great ideas have in common?" With technology and tools available these days, and in our current state of freedom of expression in our country, we were free to pursue any of the projects that were being discussed.

They require money.  Some simply would require human effort and time, which could be supplied by the people present.  But even the people supplying their time and effort have to eat and sleep.  Other aspects of such projects would be beyond our capability without travel, more tools, and more expertise or training.  But whether we focused on simply feeding the persons present while they contributed their time and effort, or we consider the traveling, acquiring additional tools, or hiring additional expertise, everything requires money.

Money isn't really anything, yet it sort of represents everything else.  With money, you can create all of what was being considered.  Even the most creative person--musically, visually, etc.--requires food, clothing and shelter.   Money gives each person freedom to choose what food, what clothing, and what shelter.  More money gives us a wider range of freedom.  Less money limits our freedom of choice. 

So where does money come from?  The bank?  The government?  In a free society, everyone has the ability to get money.  You get money from other people.  How?  By offering them something they want in exchange for money they have.  The most common illustration of this is to go to someone who is trying to accomplish something that requires human effort.  This someone needs help polishing, carrying, sanding, turning, carrying, stacking, loading, unloading, driving, bending, shoveling,--you get the point.  They need something you can give them: your physical coordination and effort, also known as labor.  How badly do they need your labor?  They propose that it is worth $12 for every hour of labor you give them.  If you think it is a fair exchange, you agree to take their money by giving them something they want.

Another way of getting money is improving something for someone.  You pay $10 to acquire several boards.  You add some of your time, energy and creativity to it with some basic tools, and change it into a beautiful fireplace mantel, and find someone who is willing to pay $100 for the mantel.  You turned your time, energy and creativity into $90.  In this instance there is now $90 worth of valuable goods in existence that did not exist before.  You literally created wealth.  Another way of thinking about it is: your time, energy and creativity are a resource convertible into money.

To do the things we want to do, even good things like spreading the Good News, we are limited in our capacity to do so by the amount of resources--money and the things that money can acquire--at our disposal.  So the conversation turns to ways to generate the necessary resources. 

One challenge that life always poses to us is: what must I do to acquire the money I need to do the things I choose?  What could be fairer than that?  I get whatever I want, by finding ways I can give (from my time, energy and creativity) other people what they want.  The more needs or desires I satisfy for others, the more money I will have available.  The more money I have, the more freedom I have to choose what to eat, where to sleep, what to wear, and even what to enjoy.

The essence of liberty is to let each person choose what to do with his or her own resources. 

"To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it." (Thomas Jefferson)

As government taxes your resources away, it deprives citizens of liberty.  "We do not commonly see in a tax a diminution of freedom, and yet it clearly is one."  (Herbert Spencer)

Fergy’s Fables: The Eviction

Once upon a time, a simple, law-abiding man named Bob lived in a modest house in a friendly neighborhood called Fair City.   Bob was like most people in Fair City.  He had a wife and children.  He went to work each day.  He smiled at his neighbors.  Life was good.

Bob and most of his neighbors had jobs.  They earned money to pay their bills.  They lived within their means.  If they earned $10,000, they had $10,000 to spend, and lived a standard of living which they could with that sum.  They shopped at the stores that gave them the most food, clothing, toys, tools and other things they wanted for the lowest price.  This way they could enjoy as many of those things as their money would buy.  If their work slowed and their wages decreased, they had to tighten their belts and do without some of the toys and entertainment.  In better times, as their income went up, they could actually live a higher standard of living and even save some of their money for a rainy day.

One neighbor, however, was different.  On a drizzly fall day Bob noticed a moving van backed up to the door of Ulysses’ white house.  There was also a “For Sale by Bank” sign in the yard.  Bob stopped by to see what was happening.  It was a sad day for Ulysses.  Bob asked him what happened. 

“I just don’t understand why the bank is making me move out!  It just isn’t fair. I usually make over $20,000 per year.  Last year I made $21,700.”

“Where do you get the money?” asked Bob.

“Fair City collects it for me from my neighbors’ paychecks.  I’m asking the Fair City council to give me a raise so I can do better at paying my bills.”

“I’m not sure I like the idea of you getting a ‘raise’ if it means taking more from me.  By the way, how much do you owe?” asked Bob.

 “$142,710,” replied Ulysses.

“Hmm.  That seems like a quite a bit for someone with your income.  How much did you spend last year?” asked Bob.

“Right around $38,200,” said Ulysses.

Bob blinked. Twice.  “Oh, I’m so sorry.  Did you have some disaster, or medical bills or something like that?”

Ulysses: “Not really.  This is just about what I spend each year.  I actually spend a lot on gifts to the City council and to people who like me.  And a big chunk is just interest on my bloomin’ mortgage!” He frowned. “That is maddening.  I do sort of plan my spending, though.  I automatically increase it every year.”

Bob: “But your income has never been more than $21,700?”

Ulysses: “That’s about the most I’ve ever made.”

Bob: “So where did you come up with the extra $16,500 to spend, if you never make that much?  From your savings?  Do you have a lock-box somewhere?”

Ulysses: Well, I used to have a lockbox but I wiped that out some time back.  Now I just put the extra purchases on my Chicom Credit Card.”

Bob: “Surely your spending beyond your means is not something you plan to keep doing forever is it? I mean, the bank is bound to get nervous!”

Ulysses: “As a matter of fact, the bank warned me of that very thing, but I did something about it.  I cut my spending back.”

“Oh, that’s good!  By how much?” Bob asked hopefully.

Ulysses shrugged: “I promised to reduce spending this year by $385.  Surely they should give me another four years in my white house.”

Bob didn’t know quite what to say.  He shook Ulysses’ hand.  “Godspeed, my friend, wherever you end up,” he said.

Every Fable has a Moral

If you add 8 zeros to the figures in this story, you can substitute the “U.S.” for Ulysses, and have an idea what those in charge have been doing in Washington, D.C. 

* U.S. Tax revenue: $2,170,000,000,000                                          

* Fed budget: $3,820,000,000,000

* New debt: $ 1,650,000,000,000

* National debt: $14,271,000,000,000

* Recent budget cuts: $ 38,500,000,000

Even these numbers are a little behind, as the debt has now passed the fifteen trillion dollar mark.  None of us could continue any such pattern and not expect to be evicted.   In Ulysses’ case, he is really only causing problems for himself.  In the case of our federal government, the problem affects us all. 

This blog is about liberty.  Every bit of spending by government is a diminution of personal liberty, for the government is forcibly taking the earnings of individuals and choosing how to spend it.  Many years ago, Herman Talmadge said,

“Virtually everything is under federal control nowadays except the federal budget.” 

The situation is far worse today than when he said it.  And to perpetuate the problem, Federal “Ulysses” is buying protection from the “bank”—voters—by how he spends.  He promises gifts like unemployment benefits, “free” health care, business subsidies, even food and shelter, if we will just let him keep up the binge.

In order to get the federal budget under control, we must unequivocally tell the spenders “No more!”  Eviction time is approaching.  Will we let Ulysses ‘buy’ our vote with another promised gift, using money he takes from our neighbors?

Fergy’s Fables: The Produce Stand

Once upon a time, a simple, law-abiding man named Bob operated a produce stand.  Of all his produce, Bob was most proud of his fresh green beans, which he sells for $1 per bag.  At that price, he makes a profit of about 3 cents.  In a typical week, Bob sells 100 bags of fresh green beans and has a steady stream of customers.  His customers like his fresh green beans.  They smile when they buy his fresh green beans.  Life is good. 

One day the Fair Constable of Fair City, that beautiful town in which Bob operates, stops by to notify Bob that the Fair City fathers have enacted an ordinance to help make fresh green beans more affordable for all:

“Affordable Beans Ordinance (hereinafter the “ABO”): All customers over 65 (aged) or of low income (poor) are entitled to obtain beans from all venders thereof, without making personal payment therefore. Under ABO the Fair City will pay vendors for same.  Since Fair City does not expend more funds than it has, and must tax our citizens to raise funds, for each bag of beans given to the aged or poor Fair City will reimburse the vendor 60 cents, the ABO Reimbursement (ABOR).  Any vender of beans who refuses to deliver to the aged or poor and accept said ABOR from Fair City shall cease vending beans.”

Bob, being a simple and law-abiding man who wants to do what is right, complies with the ABO.  Over the next few weeks Bob, being a prudent man who tracks his income and expenses, finds that about 50 of his customers are either aged or poor.  Where he used to bring in $100 and make $3, he is now bringing in $30 from Fair City ABOR, and $50 from the rest of his customers, or $80.  His costs of fresh green beans have not changed, so he is losing $17 a week.  Life for Bob is no longer good.

Bob calculates that in order to stay in business and make $3 profit, he must raise his “normal” price from $1/bag to $1.40 per bag.  He can see that if his 100 customers continue to buy one bag per week, he will receive $70 from the 50 private-pay customers, and $30 in ABOR, for a total of $100 per week.  Bob is happy with his plan, as his $3 profit is to be restored. Bob feels good.  He is a law-abiding man and he enjoys the smiles on the faces of his aged and poor customers, who get to take fresh green beans without paying.  He is troubled by the frowns and complaints he gets from the private-pay customers who now must pay $1.40.  But all in all, life is almost as good as before.

However, over a period of time Bob notices a new trend in business.  Half of his customers’ personal cost of beans went to $0.  For them, fresh green beans are an absolute steal!  Bob sees that these customers are ‘buying’ more beans.  As a matter of fact, he finds over time that they are buying an average of 1.5 bags per week. 

About this same time, the Fair City fathers are shocked to notice an alarming trend in their budget.  Before they enacted the ABO, they had carefully calculated the costs.  They studied bean buyers’ behavior and bean buying statistics.  They knew how many people were over the age of 65 and how many people fit their definition of ‘low income.’  They knew and budgeted for the 50 citizens buying their 50 bags at the ABOR of $30.  Food is a basic human need.  Everyone had to have it, whether the Fair City paid for it or not.  Surely no one would buy more beans than they needed, surely at the earlier price of $1 those citizens were buying all the beans they needed.  This sudden spike in aged and poor buying habits was simply unimaginable.  The ABOR to Fair City had skyrocketed beyond their budget expectation: instead of 50 bags for $30, Fair City is buying 75 bags for $45.

Since this is 50% higher than budgeted ABORs, vendors like Bob will just have to understand and accept ABOR payments a bit late, as Fair City attempts to solve this budget crisis.

Meanwhile, while Bob was waiting for late ABOR payments and the Fair City fathers appoint a “Super Beans Committee” to which they delegate the task of selecting which voters will be least offended by a tax increase of $15, something else was happening around Fair City.  In each home of Bob’s 50 private-pay customers conversations were occurring over the 40% price increase for fresh green beans.  Many of those families decide to purchase some other, cheaper food, like peas or broccoli.  Over a period of a few weeks, average purchases by the private-pay customers drops to ½ a bag per week.

Poor Bob!  He was making fresh green beans available to all, and now he finds himself selling each week an average of 75 bags at 60 cents ABOR and 25 bags at $1.40.  Amazingly, his total revenue is down to $80 again!  His costs have not changed.  He still supplies 100 bags of fresh green beans, and he’s losing $17/week.  Bob is a simple and law-abiding man who faces a choice.  He has worked all his life to be the best produce vender he can be. Bob simply must (1) raise prices again on private-payers, or (2) cut quality of his product, or (3) implore Fair City to limit the beans bought by their 50 customers.

At the same time, Fair City is concerned!  Their budget called for $30/week to help the aged and poor get the basic necessity of fresh green beans.  Their Super Beans Committee refuses to point the finger at any group of not-yet-Taxed-Enough-Already taxpayers, and the decision falls back on the Fair City fathers.  They must decide among various options: 

(1) Do they cut the ABOR rate from 60 cents to something less, say to 40 cents?  That would bring them back on budget, but Bob would be forced to sell 75 bags of beans at an even greater loss.  They have to wonder, what might Bob do?  Give up and just quit?  Then no-one will have access to fresh green beans.  Might Bob raise his private-pay customer rate again?  Some of those customers might blame the Fair City fathers in next election.

(2) Fair City could simply raise the ABO budget and increase taxes to bring in the $45 instead of the $30.  But, whomever that tax falls on will be angry and that won’t sit well come next election.

(3) Fair City could place a limit on the number of bags of beans the elderly and needy can buy each week.  But limit their access to a basic necessity?  That might make the aged and poor a bit disgruntled.  But they’d still get some green beans for ‘free’…and maybe an Affordable Babysitting Ordinance would help secure their votes in the next election.

After much deliberation, the Fair City fathers compromise: Bob doesn’t need to make $3 profit!  After all, beans are a basic necessity.  They amend the ABO: they forbid bean-sellers charging more than $1.40, the ABOR rate is reduced to 50 cents per bag, and they limit aged and poor to not more than 1.3 bags per week.  There, that solves it! 

Bob, being a simple and law-abiding man, closes his produce stand, joins the needy and takes his place in the line at the only remaining produce stand in town, to get his allotment of stale green beans when they become available.  The End

Every Fable has a Moral

If only that really were the end.  But it isn’t.  Everyone is entitled to beans.  The remaining stand, with no competition, has no incentive to provide quality.  It will exist only to provide ‘beans’—regardless of freshness—in exchange for unlimited ABOR of fifty cents per bag.  As more people demand their ‘free’ beans, Fair City will have to raise taxes to pay the ABOR.  The Fair City that promised everyone an allotment of beans will, by increasing regulation or direct take-over, control all production and dissemination.

Oh, sorry…you say you don’t know beans from health care?  Food is an even more fundamental ‘need’ than health care.  The real forces of rational human behavior apply to both.

When government—an amoral organization of self-interested humans—has attempted to make things like health care more affordable (Medicare and Medicaid are the equivalents for this fable), there are at least two certain consequences.  The actual costs are shifted or the services are rationed.  Or both.  Furthermore, when costs are shifted, those who escape the real cost of their services tend to over-consume.  More costs are thus incurred, and the burden is increased on those who are forced to pay, making both taker and payer willing to accept ‘compromise’ in their liberty.

Benjamin Franklin said that those who would trade liberty for security will end up with neither.  Don’t believe for a second that you can trade your liberty for fresh green beans.

[“Is there no answer then?” you ask. Three simple reforms would reduce health care costs: (1) tort reform, (2) tax deductibility on individual policies for all, and (3) freedom to shop across state lines.  Where truly needy situations exist, charities have been and will continue to be there, to take up the slack.  I’ve witnessed that very close-up. ]

Foundation for Liberty

"Liberty cannot be established without morality, nor morality without faith."  Alexis de Tocqueville's statement embodies three inter-related issues that are of interest to me, topics we will explore on this blog. 

Liberty is the state in which humans are free to act without imposition of legal (governmentally-imposed) restraints.  Your liberty is inversely proportionate to the number of laws restraining your choices.  However, until you are moral, you cannot be permitted extensive liberty. 

The word moral has been hijacked.  Most people think of it only in the context of sexual propriety.  But the essence of morality is to voluntarily treat others as you would like to be treated; to interact with others to the best of your understanding consistent with their well-being.  But what will cause you to consistently act morally? 

Nothing but faith, a firmly held conviction that what you do and how you treat others has eternal consequences for you.  Faith is a genuine belief that God is watching and holding you accountable in some way. 

Without such conviction, you...no, without such conviction I will not consistently choose to act in the best interests of my fellow man, and if I will not, I must be forced to do so by some external, temporal authority. 

The systematic severing of such convictions has led to the proliferation of tens of thousands of pages of laws and regulations in our nation. 

Skiing the Black Diamonds

A routine checkup at the doctor’s office this week reminded me of an interesting conversation on the ski lift.   "If the government would ever get it together ..."  began a skier at the other end of the chairlift.  My mental radar tuned in for the rest:  "...and provide universal health care..."   But I am getting ahead of myself.

Not knowing of any real health problems made it easy for me to be cheery at the doctor’s office.  The nurse taking my blood pressure apologized if she seemed a little grumpy and expressed her appreciation at my positive demeanor.  “So many people who come in here want us to prescribe cough medicine instead of buying it over the counter because,” she relayed, “they say, ‘I don’t have any money’.  But they’re drinking a twelve-pack and smoking three packs a day! Most of their health issues are caused by their own choices, and they think we should fix everything for them for free.”

A month or so ago I was talking to a retiree who described his carelessness about climbing into his tree stand: “But I’ve got good health insurance with my GM pension,” he laughed.  In a more serious tone: “If I didn’t, I’d have to be a lot more careful!”

There seems to still be debate in the world over this question: Do people change their behavior when they believe they no longer bear the risks?  Put another way, do "safety nets" actually result in more people falling?  We could pick many examples.  

Will serving breakfast at school lead to fewer parents feeding their children breakfast at home?
Do corn (or milk, or honey, or sugar, etc.) subsidies result in more corn being produced? 

Will giving kids condoms lead to more teenage sexual activity?
Do welfare checks to unwed mothers result in more children being born to unwed mothers?
If the government is paying for your health care, will more people go to the ER when a less costly, scheduled doctor office visit - or just eating chicken soup! - would suffice?  Will they drink and smoke more and otherwise ruin their health if they know they have ‘free health care’?

The answer to each of these questions, of course, is "yes."  This is an indisputable fact of social science.  Not everyone under all circumstances, but a significant number of people will make a different behavioral choice when the government shields them from risks or consequences associated with the choice.  Herbert Spencer put it well:

“The ultimate result of shielding men from the effects of folly is to fill the world with fools.”

Which leads me back to that original ski lift conversation that inspired this post.  Our family was skiing in Jackson Hole in 2008.   When it comes to ski runs, I am definitely a "green dot" (beginner) and "blue square" (intermediate) guy; the "black diamond" runs are for the experts: I have to watch in wonder ... and hope I don’t witness any deaths!

You learn some interesting stuff if you chat with the people on ski lifts.  I'm really not prone to initiate such conversations.  "Where 'ya from?" and "whadaya do when yer not skiing?" are about as far as I usually go.  By the way, the best answer I heard that day was, "I teach skiing." (Oh great! "Please look the other way while I stumble off of the chair lift.")  On the other hand, just listening to the people around me is sometimes enlightening.

My daughter and I were skiing together one day.  On a quad lift, I sat on one end, then she; two women were seated beyond her.  Their conversation was apparently not intended to be private.  The one lamented the fact that, although she enjoys the challenge and thrill of the more dangerous slopes, she has to pretty much stick with the intermediate trails.  "I don't have any health insurance," she explained.  "I can't really afford to blow out a knee or break an arm or something!"  Then, matter-of-fact-like, she spoke the unguarded truth:

"If the government would ever get it together and provide universal health care coverage, we could ski wherever we want to!"

Transfer the risk to others—whether health insurance or welfare—and some people will engage in more risky behavior than they would if they alone bore the risk.  Whether it's neglecting breakfast, planting too much corn, having illicit sex, drinking and smoking...or skiing black diamonds.   I wonder if she will really like what she is about to get, if ObamaCare goes forward. 

Somehow I think she may be like the people my nurse was complaining about...

Liberty Relinquished

“The course of history shows that as a government grows, liberty decreases.”
- Thomas Jefferson

“[T]hose who are willing to surrender their freedom for security have always demanded that if they give up their full freedom it should also be taken from those not prepared to do so.”
 - Friedrich August von Hayek 

"A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever."
- John Adams

Alexis de Tocqueville

Liberty cannot be established without morality, nor morality without faith.

The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.

The health of a democratic society may be measured by the quality of functions performed by private citizens. 

America is great because she is good. If America ceases to be good, America will cease to be great.

Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.

~Alexis de Tocqueville