Thursday, January 29, 2009

Where government steps in, private action steps out.

$13.4 billion auto rescue with TARP funds"
The Big 3 Auto companies can't sell enough cars to make a profit. People are unwilling to voluntarily give them their money in exchange for their cars. The government has decided to give them our money anyway.

“Doubling the production of alternative energy in the next three years.”-ARRP
Venture capitalists have not funded alternative energy research or production sufficiently to satisfy the environmentalists and politicians. Private investors did not judge it profitable (benefit exceeds the cost) to risk their own dollars on these projects. Since no one would risk their own money voluntarily, the government will risk our money instead.

“Making the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized.” -ARRP
Doctors and clinics have not converted all of their medical records to computerized form. In their individual judgment, this was not the best use of their limited resources and time. The government is planning to spend our money to have it done anyway.

“Investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.”-ARRP
If these investments are truly profitable and the best use of scarce resources, they will be funded voluntarily. Private industry and entrepreneurs are constantly looking for ways to innovate and increase efficiency while at teh same time being held to the standard of market discipline: if people are unwilling to pay for your product, you go out of business. Government "investment" by-passes the market and uses coercion to do what people will not do by their own free will.

When government steps in, private industry steps out.

This includes bank bailouts, broadband access, mass transit and other infrastructure projects, education, art, parks and recreation, charity and health care. Government only needs to "invest" when people do not invest voluntarily. Government spending substitutes the voluntary choices of millions of individuals for the coerced choices of powerful minorities and special interests.

The summary of the American Recovery and Reinvestment Plan (passed yesterday in the House 244-188) states: "There are no earmarks in this package." That's because there doesn't need to be: it is one big pork-barrel, special-interest spending bill which extends funding to every aspect of the expanding welfare state. Wealth is transferred from the productive to the less and even the unproductive; economic exchanges are transformed from the voluntary into the involuntary.

Government is coercion. When used appropriately, it protects and preserves our individual rights. When used to promote, support or fund economic activities, it can only diminish our freedom and our wealth.

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