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Distribution Politics, The Reallocation of Scarcity

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Let us pretend, for the sake of argument, and differently from those who believe there should be unlimited funding to pay for their personal cause; that there is, indeed, a limited supply of wealth to be spent. Further, let us imagine it is produced by people who work and invest, and not those who only consume. Imagine that. Now, imagine we have, as economists are inclined to believe, unlimited wants. How would you distribute the limited amount of money to those whose wants require an unlimited amount of money? What considerations would you have?

Would you make distributions based upon the wants of people, or the needs of people or the desires of a majority of the people? Just how would you make those decisions? The answers to these questions define the differences between the various economic systems. One finds that a person with socialist ideals will have different answers than a capitalist.

One consideration would be the need to encourage those who produce and invest, to continue or start and those who maintain our buildings and machines should be encouraged to continue to do their necessary work. How should we divide the limited supply of money to cause them to continue their productive endeavors? Should they get more than others? Why? Why not?

What of those who provide government services? How should their portion of the limited supply of money be determined? Should they be paid more or less than those who produce or invest or maintain? Should teachers and bureaucrats actually make more than mechanics, production workers and plumbers?  Why or why not?

Then there are those who produce nothing, who provide no services, yet society has decided to make accommodations for them as well. How should the allocation for these people be determined? Their wants range from Medicaid to Social Security, to low income housing subsidies, to college subsidies, to services for the physically and mentally disabled. How should we determine the allocations from our limited amount of money to those in this group? A recent CO article gives us an example of what doesn’t work: lawsuits and advocacy politics.

According to the article, a class action lawsuit has been filed for families of recipients of subsidies who are physically and/or mentally disabled. Their desire is for taxpayers to pay subsidies for their disabled family members whose costs can be up to $64,000 per year. According to Betsy MacMichael of First in Families of North Carolina, an advocacy group (code for lobbyists seeking money for special interests) “People with disabilities need a lot of support, and they also have a lot to contribute.” One might ask Ms. MacMichael to list some of these contributions because while the money requirements for these people are specific, what she says they contribute is not. If what they contribute is worth something, should they not sell it in order to reduce their need for a subsidy?

Let me be explicit: $64,000 per year is more than a lot of people make, people who work hard, who produce, who maintain, who provide the means for society to operate. Why is someone who is being subsidized; who is providing little or nothing which is marketable, getting more than they are? There are numerous reasons but three are political advocacy, lawsuits, and the very real threat of personal attacks.

Advocacy groups of this type are known to hound (yes hound) legislators for money to their special causes, often making life miserable for legislators who don’t offer them what they want. Making them miserable includes personal attacks, not physical, but very personal. This also happens to those who oppose them but are not legislators. For example, I have been warned to be careful of what I say for fear of this happening to me. We see this happening all too often; where someone who says something which some group doesn’t like suffers personal attacks. Then there are lawsuits: not getting what they want from the legislature, they seek judicial force to cause the taxpayers to fund their wants.

These three methods of making decisions are destructive to our society and all three should be eliminated from society’s repertoire of political decision making. Lobbying should be made illegal and lawsuits seeking to change what the legislature has written should be eliminated.

What then of those who need help to survive? Perhaps we need to examine why people who suffer need and deserve the help of others, what our real purpose is in helping them. What is society’s goal in spending money to maintain those who can offer nothing in return? If we answer those questions, without bending to the emotional arguments of the self serving, we might make rational decisions.

Unfortunately, it seems we have come to a point where special interests; from teacher’s unions, to government bureaucrats, to transfer payment recipients, have pushed, prodded and threatened our political representatives to take so much from those who produce to give to them that they, they who provide nothing, get more than those who work and produce. This is wrong.

We have, for better or worse, determined that the way we make common decisions is by electing representatives who join together to make decisions binding on all of us.  When that process is distorted by advocacy groups, lawsuits and personal threats, to one of providing an exorbitant amount for special interests, then the people who provide the funds are often ignored. But it is upon them and their efforts that we all depend, not any other way.

So my suggestion is: those who live by taking from others, by method of government taxation and transfer payments, should be more appreciative of those who supply their means of living. They should work to become most efficient in their expenditures and taking. They should have to justify every dime they receive, and show how they are working to take as little as possible instead, as we see all too often, to take as much as they can. Towards that end, those who work, who produce, who invest and those who maintain should make more money than those who don’t. Any other method is wrong.

 

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