Classical economists, those who did not worship the misunderstood tenets of the Keynesian method, realized that the so-called “free lunch” is a sleight of hand.
Legendary economist Milton Friedman even wrote a 1975 book titled “There’s No Such Thing As A Free Lunch.”
You ought to be interested in this because the basic point is someone pays for said lunch. Just look in the mirror. The single largest provider of metaphorical free lunches on this planet is the United States government.
The Friedman book should be mandatory reading for anyone in government, be they right-wing conservative or left-wing socialist. The message applies to both ends of the political spectrum and also to all those in between.
Who’s paying for all those free lunches? Taxpayers, anyone purchasing U.S. debt, future generations who will have their prospects reduced by the burgeoning federal indebtedness, and many others are, or will, pay for the freebies.
If you find prices on many of your essential purchases rising, that’s another way that you are paying for the free lunches of others via inflation touched off by the excess governmental spending.
Sometimes there even is opportunity cost for the person consuming the free offering. Maybe they are content to collect enhanced unemployment benefits rather than seek a new job. When the government assistance ends, they are left in desperate times.
This is not a theoretical discussion. In the early days of the COVID-19 unemployment premiums, workers displaced by the virus, or by overreactions to it, found their traditional unemployment benefits supplemented by an additional $600 a week. That’s $31,200 for a year, ON TOP OF UNEMPLOYMENT, which in my state of Pennsylvania is 50 percent of working income up to a maximum of $573 a week.
There were more than a few stories of employers getting federal payroll assistance loans/grants to call workers back to their jobs and said workers, who were making as much or more staying home, being angry at the employer.
Yes, the unemployment benefits theoretically don’t extend past 26 weeks. But even if they didn’t, the unemployed worker could be collecting the equivalent of more than $60,000 annualized.
And these things have a way of being available well beyond stated limits. An acquaintance of mine milked extended unemployment benefits for more than two years during the 2008-09 economic meltdown and after a brief rough patch, rode that right into a career on Social Security disability, one of the few growth industries in this country.
He got his free lunch; many of them. Anyone on the tax rolls paid for that – after this individual’s contributions to unemployment and Social Security are deducted, as well as those of his employers.
It’s safe to say that guy is a net beneficiary of the system.
Multiply him by millions and you get an idea of the extent of the problem.
Even proposals that seem benign on the surface bear costs. To someone theoretically benefiting from the free lunch of an increase in the minimum wage to $15 an hour, there are potential drawbacks such as reduced hours or complete elimination of the job.
Raise the labor cost high enough and automation – computerized order systems at fast-food joints, for example – become cost-effective.
Companies will not absorb the higher minimum wage, so consumers will pay higher prices for good and services.
Pushback from the few in government who understand economics has resulted in the minimum-wage surge being held up, stimulus checks being marked down from $2,000 a head to $1,400, and the weekly unemployment supplement being negotiated down to $300 extra per week.
That is the current status, but such things are fluid. And, rest assured, millions more “free lunches” are being prepared for the flood of illegal immigrants about to be accorded residency here.
For all of you not yet on the gravy train, better hop onboard quickly. To all those currently partaking of the so-called “free lunches,” enjoy them while they last, because they cannot go on indefinitely.
What is economically impossible cannot continue forever. That’s one law that even woke, cancel culture, or social justice warrior types cannot repeal.
Sam Ross Jr's site 