GOVERNMENT'S FREE LUNCH

When it comes to violating all economic laws, the government will find a way. Some corporations believe that they can violate economic laws with impunity because of their size. This goes on for awhile, but eventually it will all come crashing down because absolutes exist and can not be violated without there being repercussions. Eventually, judgment day comes. Instead of learning from the failures of the past, the government and some corporations continue to implement disastrous policies.

One economic law is that more will be demanded at a lower price. This is why businesses have sales. Businessmen know that more people will buy more of a product if the price is lowered. This law works for two reasons. One is that the lower the price makes it affordable for more people. Every time the price increases on a product, more buyers are excluded. The market for a particular product decreases with price increases. In other words, more people are being priced out of the market. The other reason is that the frugal are looking for ways to save money, so they will stock up on sale items.

Most people have heard the statement that there is no free lunch. Lunch may be free if you are not paying for it, but someone must pay. Free lunches do not exist. Only God can do things for free because only He possesses the ability to create something out of nothing. We lack this ability. We can only take what exists and make something out of it. We must get paid for our efforts in order to provide for our physical existence.

Government attempts to play God when trying to provide free lunches. Governments believe that they can create something out of nothing and their attempts always end up in failure. A recent example is in the State of Hawaii where the government is ending universal children’s health care. One of the reasons that the program is being ended is because of budget constraints. The program is being cancelled after only seven months.

Another reason cited is that people who had health care coverage for children dropped it so that they could get in on this government welfare (handout) program. Why pay for something if the government is going to give it away for free? When the government offers free lunches such as universal child health care, what always happens is that demand will exceed supply every time and everywhere it is tried. As Gary North has said repeatedly, "God is not mocked at zero price."

When demand exceeds supply, what happens is that prices begin to rise. This means that the government will require more tax money to pay for medical services or the government will pay only so much for medical services rendered by medical professionals. One of the causes of high medical costs is government money increasing demand for limited medical services. This has an opposite effect from what governments intended.

The Hawaiian failure should be a beacon to every government to avoid the rocky shore of free lunches. It is apparent that legislators have not been trained in economic law. For them there are no absolutes. This will always be the problem with these types of legislation, these laws are passed without regard to absolutes. Unfortunately, these lessons are never learned. If it is not a free lunch for children’s health care, it will be something else. This process never ends because governments are determined to play God and unfortunately, the people want it this way.