Monday, February 9, 2009

Kerry: Government knows best

John Kerry: If you put a tax cut into the hands of a business or family, there's no guarantee that they're going to invest that or invest it in America. They're free to go invest anywhere that they want if they choose to invest.

This is the perfect illustration of the difference between individualism and collectivism, private property and government. If the government allows us to use our money as we see fit, we obviously will seek to maximize our returns. Each individual will determine whether he should spend that money, pay down debt, invest the money in the stock market, or invest it overseas. In this way, each person will maximize his own happiness.

The government thinks it is smarter than the citizens it rules over (Hayek's fatal conceit). Thinking it knows what is good for the people, the politicians and bureaucrats decide what to do with our money. But their "one size fits all" solution is guaranteed to make only some people happy. Politicians, unlike individuals, try to maximize the happiness of "society" and not of each individual. In reality, a good politician will please just over 50% of the people in order to get reelected. And that's the good politician. The bad politician will actually make the majority of people worse off.

In this "financial crisis," the government should stop trying to help the people, which is guaranteed to hurt a large percentage of the population. Give us our money back and let us decide how best to spend or invest it.

PS This is from a purely economic standpoint. Even if the government were able to help each individual to the maximum effect, we are still ignoring the loss of liberty we have suffered as the government takes our money and decides how to use it. How many of us would sell our freedom for a few dollars? We sacrifice our freedom in exchange for the government's programs that the promise will help us. If the government delivers, what we have lost, our freedom, far outweighs what we gain. But since the government consistently overpromises and underdelivers, we in fact sacrifice our freedom for government programs that make us worse off.