Principle No. 5: Government has nothing to give anyone except what it takes from someone else
“A wise and frugal government shall not take from the mouth of labor the bread it has earned.”
- Thomas Jefferson, First Inaugural Address, 1801
“If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must become happy.”
- Thomas Jefferson, 1802
Nothing in life is free. “There’s no such thing as a free lunch.” When we get a product or service at no cost to us, it simply means that someone else paid for it. Everything costs somebody something.
We have an unwritten policy in our organization never to use the word “free” unless it is associated with freedom. If we are given a product or service we would normally have to pay for, we say we received it “at no cost to us.” We do this as a constant reminder that nothing is “free.” Whether it cost time, money, energy, or something else of value, somebody paid for it, and we should be grateful. (Incidentally, we have a written policy that we will not ask for or accept money from the government for our programs or projects.)
Often we think of government programs and benefits as “free”, but the only way government can give something is to take it from someone else. Even when the government pays for administrative items its employees use, it can only do so with money it took from someone else. If it earns income from land or other property it owns, it can only do so because it first took the land or property from someone.
As mentioned in Principle #2, Scottish philosopher Alexander Tyler said in the late 1700s, “democracy…can only exist until the voters discover that they can vote themselves largesse from the public treasury.” Every dollar government gives in contracts, grants, welfare, etc. is actually money it has taken from the pockets of other Americans.
Few people enjoy paying taxes. As one comedian says, “Taxation with representation ain’t so hot either.” The fourth Chief Justice of the U.S. Supreme Court, John Marshall, wrote, “...the power to tax involves the power to destroy; the power to destroy may defeat and render useless the power to create.” Taxes in themselves are not destructive; excessive taxation, however, breaks the entrepreneurial spirit, resulting in less economic activity and fewer jobs for the citizens.
Obviously, government needs money to pay its legitimate expenses, so this is not a diatribe against all taxes. However, as Milton Friedman reminded us, nobody spends someone else’s money as carefully as he spends his own. When we spend our own money we seek the best price and the most appropriate product or service. When it is “someone else’s” money, it’s easy to splurge and be extravagant.
A common blind spot for state legislators and other state officials is the fact that money appropriated by the federal government is still money taken from taxpayers—including taxpayers who live in Mississippi.
In the first episode of The Beverly Hillbillies, Jed Clampett’s sister asks how much the oil company is going to pay him for the oil on his property. Jed said, “Twelve dollars.” His worldly-wise sister was shocked: “Only twelve dollars?!” To which Jed replied, “Yeah, but it’s some new kind of dollar. I’ve heard of paper dollars, and I’ve heard of silver dollars, but these are called mill-ee-yun’ dollars.” Most politicians at the state level seem to think Washington invented a new kind of dollar that doesn’t really cost anybody anything. They call them “fed-er-al” dollars.
These dollars are highly addictive, even leading to the development of creative schemes to "maximize" them. This simply means, "I don't care what I have to do to get more of those 'fed-er-al' dollars; I want all I can get."
Many who were once considered conservative now treat government as the savior, as long as "federal dollars" are the currency of that salvation. But taxpayers beware: when state lawmakers "maximize federal dollars," it just means they are taking more of your money without taking direct responsibility for doing so.
In the first edition of Governing by Principle, we included the word "first" before "takes from someone else." We have removed that word because of the reality that government is giving away money it has not yet collected! By financing current spending with borrowed funds, our government is obligating future generations to pay for our whims long after the money has been given to someone else.
Those who serve in office must remember that the ability of government to give to one means taking from another. Those who recognize this stewardship principle will govern with humility and restraint.
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