I was reading through an article that describes the awful tax rates the wealthiest in New York will be facing because of the Democrat’s universal health care plan when I had to stop and re-read a sentence. Then, after re-reading it, I had to read it one more time.
Then I shook my head in disgust.
The article quotes Obama as saying, “The American people have to realize that there’s no such thing as a free lunch.”
Since the context of the article is how high taxes are going to be, I assumed he was saying that taxes are high because nothing is free, justifying the need for high taxes. But I wanted to be sure, so I tracked down the interview. Here’s the exchange in the transcript:
Snyderman: If you look at this big deal …
Snyderman: … do you have people at the bargaining table, the pharmaceutical industry hospitals in there?
I haven’t heard anyone ask just for the American public to pony up here, that this is going to require some give for all the stakeholders involved.
Obama: Well, let me — let me talk about what I think the American people are going to have to do.
First of all, the American people have to recognize that there’s no such thing as a free lunch. Right? So, we can’t just provide care to everybody that has no cost whatsoever, you don’t end up having to make any decisions.
This is sickening. This smug, Marxist windbag is invoking TANSTAAFL? He doesn’t even get the meaning of the phrase.
“There ain’t no such thing as a free lunch” (Tanstaafl, get it?) originated way back in the late 1800s, when saloons offered free lunches to the homeless. All they had to do was buy one drink. How could they do this?
Well, the drinks were higher priced than other saloons, perhaps, or maybe rooms were more expensive. One way or the other, the cost of those free meals would have to be recouped. If they weren’t they would have to eventually go out of business.
Wikipedia actually has a great article on the history of the phrase, but TANSTAAFL is summed up here, by Greg Mankiw, noted macro economist, who from 2003 to 2005 was “was the chairman of President Bush’s Council of Economic Advisors.”
“To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another.”
In “Atlas Shrugged,” Ayn Rand had character Francisco d’Anconia summed it up when he said, “You can’t have your cake and let your neighbor eat it, too.”
But the book that used the term the best was “The Moon is a Harsh Mistress” by Robert A. Heinlein. What was the meaning of the phrase?
Don’t be a slave to the government:
In Heinlein’s novel, citizens of the moon expected to pay for what they received, even the air they breathed. These hearty, self-reliant people cast off their repressive masters on Earth and established a a free society. This book is beloved by libertarians.
The point of the phrase is that people must be responsible for their own welfare, not the state. Heinlein literature abounds with comments and situations in which a lack of self-reliance has a degrading effect on the human condition. This is where the “no free lunch” comes into play.
Heinlein was deeply suspicious of state-sponsored altruism to help the poor. He believed it robbed them of their independence.
That is a theme I have tried to reinforce on this blog. We are walking away from our independence towards dependence on the state, hence crossing the Bridge to Dependence.
It’s simple. There is no such thing as free health care. It will come at a cost, and it will cost more than taxing rich people or rich companies. Tanstaafl is one of the economic truisms. Another one is when you subsidize something, you get more of it. When you tax something, you get less of it.
So, let’s look at universal health care through those two lenses. You establish universal health care, but tanstaafl. So in order to pay for this “free health care,” you tax the rich. Well, you are subsidizing health care, so naturally you are going to get more of it. That’s been the result in Massachusetts. They are experiencing an overwhelming number of patients, more than they expected.
But you are also taxing rich people, which will cause them to leave for other, greener pastures. So now you have a growing cost, but dwindling revenue. And let’s not pretend it will only be money that leaves. Jobs will disappear also. Companies won’t be able to expand, because it will cost too much. Companies will move their factories overseas.
The truth of this is Michigan. It has been run by Democrats for how long now, and look a the shape it is in. Taxes high, programs aplenty, but jobs no where to be found.
Tanstaafl. You cake have your cake and let your neighbor eat it too. Someone has to pay.
Maybe you want to make pharmaceutical drugs cheaper, so you place price controls on them. So now the drug companies are denied the profits from those drugs, which they use to develop new drugs. Knowing that there will be no future profits to recoup the expenses of research and development, they stop making new drugs and focus on lowering the cost of manufacturing. Now, the cost of your “free medicine” is the drugs that could have saved your grandchildren from cancer or diabetes.
Everything has a price. You get health care coverage at work at a cost of lower wages. If your employer didn’t provide health care, they could pay you more.
You get a public school, even if you homeschool and even if you have no kids, at a cost of higher property taxes.
You get a free sandwich at a restaurant, someone, somewhere, somehow is going to pay for that, even if they don’t want to.
Everything provided to you comes at a cost. Everything. The cost may not be monetary, it may not even be visible, but it exists. That’s why it’s ridiculous for a president advocating universal health care to invoke this phrase. It’s not that I should understand that higher taxes come with free health care. It’s that with free health care, I become more and more dependent on a government master who provides for me, or in reality, refuses to provide for me.
It’s supposed to be a warning, not a justification for higher taxes and socialist programs.