The Great Fiction

Reading about President Biden’s proposals to “go big” with trillions of dollars of new spending, including spending on COVID relief that has nothing to do with COVID-19, and infrastructure that is not at all what would traditionally be described as infrastructure, I am reminded of the words of the nineteenth century French economist and classical liberal Bastiat: “The State is the great fiction by which everyone proposes to live at the expense of everyone else.”

It might perhaps make sense to spend hundreds of billions of dollars on this project or that, but when the government spends vast sums on a multitude of projects and programs, then even those who benefit from one expansion of government will likely be worse off in consequence of having to help pay for all the others. And does anyone say that Biden won’t raise taxes on anyone making less than $400,000 per year (and is therefore not imposing carbon taxes, which might actually be a good idea)? Even if the bills are not immediate or visible, people will end up paying, one way or another. There is no such thing as a free lunch.

The Great Fiction

Reading about President Biden’s proposals to “go big” with trillions of dollars of new spending, including spending on COVID relief that has nothing to do with COVID-19, and infrastructure that is not at all what would traditionally be described as infrastructure, I am reminded of the words of the nineteenth century French economist and classical liberal Bastiat: “The State is the great fiction by which everyone proposes to live at the expense of everyone else.”

Spending hundreds of billions of dollars on some particular project might perhaps be justified, but spending trillions on a multitude of government program and projects is not. Even someone who benefits substantially from a particular item in Biden’s agenda is likely to be made worse off in consequence of having to help pay for all the other expenditures. Does anyone say that Biden is not raising taxes on people making less than $400,000 per year? (And is therefore nor seeking to impose carbon taxes, which is something that I believe ought to be done.) Even if the bills are not obvious, nor presented immediately, they will have to be paid; everything the government does has to be paid for one way or another. There is no such thing as a free lunch.