Don's Tuesday Column

       THE WAY I SEE IT   by Don Polson  Red Bluff Daily News   8/23/2016

               Drugs, gov’t spending hurt liberty

America’s freedom has declined by an objective standard, particularly economic freedom, as I showed last week. Our ranking as a nation dropped from the 17^th freest nation in 2008 to 20^th freest a year ago, a decline that began in 2000. The report cited “a steady decline of economic freedom and ‘rule of law’…the war on terror, the war on drugs and the erosion of property rights, due to greater use of eminent domain, all have contributed to the U.S. decline.”

I stated that the “wars” on terror and drugs were more detrimental by their failure. Terrorism, by its proliferation, is very destructive to the sense of freedom and security that citizens require to carry out their normal, inherently economic, activities. Simply look at the inevitable negative impact terrorism has on airlines, airline customers, and the general sense of safety people expect in restaurants and public events like concerts.

The drug culture has nothing but negative economic repercussions, including the pot economy; growers, legal or not, reap profits but the money that goes “up in smoke” by marijuana users is, by definition, not spent in economically productive ways. Like gambling, drug usage deprives various other businesses of the benefit of normal buying and selling.

Areas, whether urban and minority or rural and white, that suffer from the intractable scourge of crime and violence that accompanies drug cultures, cannot sustain the retail activity they would absent drug gangs and users. Users inevitably become of marginal use to employers. Businesses, insecure from thefts that feed drug habits, flee to safer locations.

One can easily make the case that the monetary drug of dependency on government benefits has, on balance, negative economic repercussions. Another writer made the same point, calling it an addiction. The annual allocation of hundreds of billions of budgetary dollars, must be extracted from taxpayers, or borrowed requiring repayment by future taxpayers.

What used to be pejoratively referred to as being “on the dole,” has become a tolerated, encouraged, even praiseworthy means of supporting oneself and one’s dependents. You can argue the conspiratorial intentions of big government types and the political class in the inexorable growth of welfare, food stamps, housing subsidies and medical care; but set that aside and just consider its economic effects.

Historically, the aversion by Americans to accepting handouts had to be overcome for the purpose of inducing otherwise able-bodied but temporarily “down on their luck” workers to take free money. Government program directors and advocates overcame that hurdle to gain acceptance by recipients, and approval by the taxpaying public; they had to make it respectable to live off the good graces of others. Many hard-pressed citizens avoided even private charity, donated for the purpose of being given away to anyone needing it.

However, when it became “the business” of government to distribute funds extracted from productive citizens via the Internal Revenue Service (Get it? It’s a “Service”) to those who did nothing to earn them, something else came with it. Government “redistribution” became ingrained in America’s economic life; moneys removed from the private sector via taxation created a secondary economic stream. It’s been hypocritically described by welfare/food stamp/unemployment benefit fans like Nancy Pelosi as “the best thing for boosting the economy.”

No irony is detected over the fact, the irrefutable economic fact, that transferring money through such programs is a net drain, a drag if you will, on the private sector. It’s rarely acknowledged that by encouraging people to accept government dependency, they are dis-incentivized from the natural tendency to improve their skills, hone talents, and use their innate imagination to create and improve personal worth.

We now have the quantifiably negative results, for state budgets, of providing health care for the poor through Medicaid. Look up and read, “Growth in State Medicaid Spending Crowding Out Spending on Other Major State Programs” by Marc Joffe, Oct. 28, 2015. It’s an analytical product of the Mercatus Center, George Mason University, “Long-Term Trends in Medicaid Spending by the States.” It shows how “expanding state Medicaid spending is ‘crowding out’ spending on other major state programs, most notably education and transportation infrastructure.

Remember that, but for Medicaid expansion, Obamacare has failed to change (it actually marginally reduced) the number or percentage of privately insured Americans. Obamacare has made health care, particularly health insurance, more expensive; part of the reason is the Medicaid expansion because the program greatly underpays providers. Allowed insurance rates for Obamacare policies have drastically ballooned, and failed to keep pace with the expenses associated with self-selection of plans by less-healthy adults.

Rounded figures show that, while Medicaid spending by states grew from 19% to 26% of their budgets from 2000 to 2014, K-12 education spending declined from 22% to 19.5%; public assistance, corrections, transportation and higher education also declined over the same period.

“The percentage of state spending nationwide devoted to Medicaid has increased as Medicaid enrollment and spending have grown…Even as state budgets have increased over time, spending for Medicaid has grown faster, leaving relatively fewer resources for other areas that states might like to prioritize, such as schools and roads.” That, readers, only hurts America’s economic freedom. We’ve gone beyond the economic limits of government benefit spending.