The False Freedom of Government Dependency

The report from the Congressional Budget Office that the Affordable Care Act will cost 2.4 million jobs, rather than adding jobs as originally proposed, is receiving quite a bit of spin .  Because the report states that many people will choose not to work, given that they will now be able to receive heavily subsidized healthcare without needing to work, it is being hailed as a way for individuals to gain new freedom.  As Nancy Pelosi said when the healthcare law was being drafted, an individual will be free to pursue interests such as playing guitar rather than go to a nine-to-five job.

This blog is all about economic freedom.  The goal is to give readers the tools needed to become economically independent so they don’t need to rely on their jobs for income.  There is a difference, however, between being free because you have accumulated the resources needed to provide for your own needs and to rely on others to provide for your needs for you, particularly when those individuals are not doing so by their own free will.  The former is true freedom because it cannot be taken away by anyone, except through thievery or force, and comes with no strings attached.  The latter is false freedom since it is freedom subject to the whim of the government which can make demands at any time of those receiving the benefits or simply cut the benefits off entirely.  The former is a rock fortress.  The latter is a sand castle.

Imagine a society in which 100 families have farms.  They all take care of their farms, grow the food that they need, maintain their own houses and take care of their own livestock.  Perhaps they trade for a few of the things they need, such as steel nails and tools, but for the most part they work to provide what they need to take care of their farms and their families.

Now imagine that half of the families decided that they didn’t want to work anymore, at least not doing the things they needed to do to keep up their farms and raise their food.  (Given that about half of the people in America are now on government assistance of some sort, that is similar to the ratio of workers to non-workers in America.)  Instead, they go to the other families and demand a share of their harvest, delivered to their door and ready to eat.  They don’t want to maintain their homes, so they demand the other fix their houses, chop wood and put it in their stoves for them in the winter, and  perhaps wash and mend their clothes.

For a moment ignore the unfairness that some would be working hard and others would not be working at all in this scenario.  Just look at the quality of life that would result. When everyone was working, there was enough being produced such that each family had more than enough to survive and flourish.  If there were individuals in the community who could not take care of themselves, for example, someone who was blind or injured in an accident, it would be no trouble at all to find the resources to provide for them from the surplus.   With only half of the people working, it would be difficult to provide enough for everyone to merely survive, let alone flourish.  The quality of life would decline for everyone, and there would be little available for those truly in need because there would be a lot less to go around.

So perhaps there would be less goods and services available, and it would be bad for the people who were working since they would receive less from their work, but it would still be better for the people who chose not to work anyway, right?  Well, not really.  A side benefit to a system where people work to provide for their needs is that they spend time doing things that help other people.  People get up in the morning and go to work as a service for other people, whether they realize it or not.  The pride that comes from a good days work isn’t just due to the fact that one is providing for oneself.  It also comes from spending the whole day doing useful things that meet the needs of others.  Basically, serving a higher purpose beyond simply meeting your basic needs.

If healthy, perfectly capable individuals are provided with enough to sustain themselves without needing to work, they will miss out on helping other people and being useful to society.  Their entire lives will have been a waste.  Even if they are an artist, if they produce paintings of music that are of no use to anyone, as evidenced by the fact that they cannot make any money selling them to others, the fact that they lived will have had little effect on others.

Without the incentive to work there is also little reason for people to better themselves.  One of the sad things about the living wage proposals is that it would cause some individuals to never try to raise themselves out of these entry-level jobs because they would not need to.  How sad would it be to have someone who spent their entire lives doing a job that they could have mastered the first day?  Minimum wage jobs are entry-level positions meant to provide experience so that one can become more valuable than one was walking in off the street.  As one becomes more valuable, and is able to meet the needs of more people, one gains higher wages.  The goal of everyone should be to work their way out of entry-level jobs to the point where they are producing enough to provide for their families before they have families.  People who gain skills are able to produce more.

Realize also that “freedom” built on dependency on the government is not freedom at all.  If you are reliant on the government for your basic needs, officials in the government have control over you and your life.  Even if the benefits are given out with no strings attached indefinitely, you are still setting yourself up for misery should the government be no longer able to provide those benefits (something I expect to happen in the US within about four years, given our current debt and deficit).  As you sit not doing anything useful with your life, you are missing out on the opportunity to learn and improve the skills you need to produce and provide for  yourself and your family.  Without those skills, it will be very difficult to survive should the government hand-outs stop.  If you were an employer, how likely would you be to hire an individual in his thirties or forties who has never gained any skills, including just the basic life skills like getting up on time and showing up reliably?  You may also not receive a lot of sympathy from those who were working all that time to support you against their will.

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Disclaimer: This blog is not meant to give financial planning advice, it gives information on a specific investment strategy and picking stocks. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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