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Ayn Rand’s Producers and Our Food Stamp Boom

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Producers, you deserve to keep every penny you earn. But as more and more of your profits go to the government, you can’t help feeling sapped out. Much of that feeling comes from knowing the money is misspent and could do more good in your hands. You respect money. That respect impels you to make sure it’s used wisely. Bureaucrats have no respect for money. It comes too easily to them.

“Money’s easy.” That’s the feeling the Obama White House conveys when it burns your money on green pet projects like Solyndra, or when it rejects job-creating projects like the Keystone XL pipeline. It feels thoughtless when the reason for rejecting XL was that they didn’t have enough time to evaluate it. And the White House is offended for being called out on the food stamp boom that’s taking place on its watch.

We’re past the point of the government being too big. The government counts every dollar it spends as if each one brings the same result. That’s wrong. Compare spending on core services such as the maintenance of roads and bridges to the cost of keeping people on the government dole with no incentive to seek or find work for fear of losing their benefits.

The marginal benefit for every dollar spent by government has long been in decline. Yet government GDP stats account for every dollar equally. In reality, the return on government spending is pennies. In The Great Stagnation, Tyler Cowen of the Mercatus Center at George Mason University writes:

A dollar spent on welfare for the poorest is more valuable than a dollar spent extending the program to better-off but still poor cases. And so on. Yet when it comes to national income accounting, and measuring GDP, we are valuing every one of these different expenditures at $1. In our measurements, we are assuming that the quality, importance, and efficacy of government stays constant as the size of government grows.

Over time, an increasing percentage of what we spend on government is spent on optional rather than core services because the core services tend to have been around longer. Another way of putting it is to say that the marginal value of added government, even if positive, falls as government grows larger.

In Rhode Island, roads and bridges can no longer be maintained without higher tolls and taxes. “I’ll tell you, it’s not good,” Governor Chafee said regarding potential cuts and tax increases. Cuts “are going to be very unpopular. You can’t do it all on cuts.” George Nee, president of the Rhode Island AFL-CIO, recently suggested raising the income tax on the state’s wealthy to deal with the crippling local pension plans. Are there any wealthy people left?

Hello? Let’s end the cozy relationship between government and union leadership. They’ve misspent your money and have overpromised on other people’s benefits. Keeping more of your money should be your right. Not theirs.

Earning money is virtuous—someone willingly pays you for your services. Yet that’s too much for some to swallow. It reminds me of big brother bully Jim Taggart in Ayn Rand’s Atlas Shrugged, complaining that his sister, the heroine, Dagny Taggart, is more interested in their business better serving its customer, Ellis Wyatt and that she’s coldhearted because she thinks it’s wrong to take part in developing an underprivileged country that never had a chance.

Dagny responds, “Ellis Wyatt is not asking anybody to give him a chance. And I’m not in business to give chances. I’m running a railroad.” Jim responds later, saying, “That’s an impractical attitude. Selfish greed for profit is a thing of the past. It has been generally conceded that the interests of society as a whole must always be placed first in any business undertaking.” Which is exactly what the government and union leadership continue to do.

Rhode Island’s December unemployment rose to 10.8%, marking the fifth consecutive month of job losses, for a total of 8,500 jobs lost over that time span. In a letter shared with the Governor’s Workforce Board Thursday, Chafee wrote, “I urge you to redouble your efforts to create training and employment strategies and opportunities for unemployed Rhode Islanders.” There goes another $350,000 of the producers’ money.

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.
E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.