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Citizens lining up for Obama Money confirms fears of dependency cycle
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Recent video of citizens lining up for government handouts seems to confirm the need for greater personal responsibility and less economic dependency. While the left is attempting to redistribute wealth in order to accomplish “bottom up” stimulation of the economy, which is rarely successful, the right is arguing that letting folks keep and spend their own money ultimately leads to greater overall prosperity. Sorting out who is right between Austrian economics and Keynesian economics is beyond the scope of this article; however, recent examples do seem to support contentions from the right that government programs take wealth out of the private sector, prohibiting its use for savings or investment. This creates a cycle of dependency via redistributionist policies.
At the core of the general philosophical disagreements between fiscal conservatives and economic progressives is the proper role of government in everyday life and the economic decisions of individuals and families. Libertarians and fiscal conservatives believe the best thing government can do is maintain an environment conducive to business growth and prosperity by protecting private property rights and then just generally stay out of the way so individuals may pursue their own destiny. Progressives and modern liberals generally seek government control over large areas of economic decision making in order to push a particular political agenda, such as protecting the environment or ending discrimination, and generally taking care of citizens. (Classical liberals are more libertarian and very different than modern liberals)
To clarify, it is not that conservatives don’t care about the well being of citizens, rather they point to historical examples where government intervention did not solve the stated problem and may have even exacerbated it, but government efforts did interrupt natural market signals and limit economic growth. Similarly, it is not that progressives are opposed to small business growth and investment per se, but they do believe that enlightened experts, given enough authority, can hit upon just the right balance of sustained economic growth while using government regulation to pursue an “ideal” society. This is also why conservatives were arguing as far back as 2003 that George W. Bush was not a conservative, whatever he may have called himself; he was not following fiscally conservative policies.
One thing both sides agree on is that, since government produces nothing, it may only secure capital either by taking it from the private sector, through taxing or borrowing, or by simply printing money. Both of these options have detrimental effects on long term economic well being. One side effect conservatives point to is the cycle of dependency. As F. A. Hayek alluded to in his seminal work, The Road to Serfdom, government largess reduces drive and entrepreneurial spirit in the recipients, de-incentivizes savings and productive work, and reduces personal responsibility by shielding individuals from the ill effects of their own economic decision making. These government policies have the secondary effect of reducing economic opportunity, forcing more citizens to seek more government benefits. As citizens become ever more dependent on government for their daily bread, they willingly give up a continuous and larger share of their liberties.
Recent video and audio from Detroit, a city destroyed by 50 some odd years of economic mismanagement seems to confirm these assertions. As multitudes of citizens lined up for applications to receive stimulus funds for housing and utility assistance a local reporter was asking citizens why they were in line and where the money came from. The citizens did not seem to understand the money came from productive members of the private sector, or even understand the concept of a cycle of dependency. The audio is posted below; I leave you to form your own conclusions.
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