The somewhere where the money comes from

Henry Hazlitt was a journalist, literary critic, economist and philosopher. His writings appeared in such publications as The Nation, the Wall Street Journal and the New York Times (frequently heading the book review section), H. L. Mencken’s American Mercury and Newsweek.

While at Newsweek he wrote Economics in One Lesson, first published in 1946, and in his later years Hazlitt expressed surprise that the book had become his most enduring work. It is eminently readable; it does not contain mathematics or formulae. It presents its case in plain language that is easily understood. According to Lew Rockwell of the Mises Institute, it may be the most popular economics text ever written. He lauds Hazlitt’s message as simple but profound: “The art of economics consists of looking not merely at the immediate but at the longer effects of any act or policy; it consists of tracing the consequences of that policy not merely for one group but for all groups.”

In the first chapter, Hazlitt states there is a tendency for most people “to see only the immediate effects of a given policy” leading to “the fallacy of overlooking secondary consequences. In this lies almost the whole difference between good economics and bad.” Hazlitt examines the unintended consequences of government policy and especially government spending in what he calls the “special pleading of selfish interests,” which we today call “special interests.”

The late Wisconsin Sen. William Proxmire used to issue monthly “Golden Fleece” awards that recognized particularly egregious examples of government waste. He issued 169 of them until he left the Senate in 1988. West Virginia Sen. Robert Byrd referred to the award as being “as much a part of the Senate as quorum calls and filibusters.” One of Proxmire’s most noteworthy awards was to the National Science Foundation regarding a study on love. Said Proxmire, “I believe that … Americans want to leave some things in life a mystery, and right on top of the things we don’t want to know is why a man falls in love with a woman and vice versa.” Obviously Proxmire believed in the right to privacy.

Oklahoma Sen. Tom Coburn has recently taken up where Proxmire left off, publishing an annual “Government Wastebook.” Proxmire, who was a Democrat, used to get a lot of media coverage for his efforts. Coburn, who is a Republican, not so much. One of the highlights of Coburn’s report is a grant by a federal agency to promote the consumption of caviar. “Let them eat cake?”

I can’t help but think of Hazlitt when I read about the awarding of government grants. They are announced in the press with much fanfare. I know that for some, the news of the grant causes great excitement and exhilaration. The grant will obviously benefit the recipient and certain special interests. However, as Hazlitt points out, the money comes from somewhere — taxpayers — and he asserts that “they will have that much taken away from them which they would otherwise have spent on the things they needed most.”

That manifests itself even on the smallest of levels.

Recently, the Jefferson County Commission passed the $40 annual ambulance fee. If we leave aside the question as to why the government needs to be in the ambulance business, for my part, paying the $40 will not compromise my standard of living. For me, it might mean having to forego eating out one night for the year. Not a big deal. However, what it means is that there is a restaurant out there that will be out $40 in revenue. Still no big deal, until you potentially have to multiply that by everyone who has to pay the fee. The money comes from somewhere, and when government policy diverts resources to a particular purpose, there is someone somewhere that will go without. Further, there are some folks who will feel the impact of the fee to a greater extent than I will. Anecdotally, in talking with one neighbor, there will be a child somewhere that will not receive a birthday present that otherwise would have.

The taxpayer does not have a choice as to whether or not to pay taxes or fees. If you don’t pay, your property is confiscated or you lose your freedom. When the government wastes taxpayer money, it suffers no consequences. If you or I waste money on something frivolous, we have to deal with the consequences. We are responsible.

According to Newton’s laws of motion, for every action there is an equal and opposite reaction. The laws of economics are as immutable as the laws of physics. For everything that the government “provides” there is an economic consequence, which is borne by the taxpayer, whether he likes it or not.

—Elliot Simon

writes from Harpers Ferry

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