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When Free Isn’t Free

Richard Quinn

DO A QUICK REVIEW of Twitter and other social media sites, and you’ll find extensive use of the word “free.” The dictionary defines free as without cost or payment.”

College, health care, child care, preschool, even housing are often mentioned in connection with “free.” The actual cost of “free” may not be what it seems. Free in this context typically means shifting the cost from one person to another, or redirecting money to some favored purpose. The true cost of free may be an expense passed on to the next generation in the form of accumulated debt.

Free education in my community, for example, costs 58% of our $13,000 annual property tax bill. How often have you heard someone complain about property taxes? But at the same time, our public schools are popular and celebrated. Citizens complaining about their property taxes seldom draw the connection between their taxes and what the schools cost.

Even if they do, they’re not usually aware of the total cost. In many states, including mine, teachers’ pensions have never been adequately financed. The true cost is usually hidden from taxpayers as an unfunded obligation.

I imagine that everyone knows that nothing is truly free, so why are we so susceptible to the lure of free things? Well, it’s an easy concept to understand—and it sure sounds appealing.

But how accepting would we be if, instead of “free,” the cost of something was described as “hidden in your taxes”? Or what if something “free” came with the proviso that “the cost is to be paid by your children”?

Politicians use free to add appeal to a proposal. Yet often they do so without consideration of short-term costs and consequences or long-term government debt. Who will pay that burden in the future?

Social Security and Medicare are two excellent examples of short-term thinking. To avoid talking about costs, funding and taxes, politicians have allowed both programs to deteriorate slowly toward insolvency.

All the while, calls for free health care and enhanced Social Security benefits proliferate. These days, many citizens seem willing to abandon the broad-based funding of such social programs in favor of tapping only the “wealthy” to keep them going. As a society, are we any different from those families who live beyond their means and don’t save?

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Paul Newton
1 year ago

The last sentence in the article asks “As a society, are we any different from those families who live beyond their means and don’t save?” Maybe it is not the same as “society” but, because we have our own fiat money system, our federal government is “different from those families who live beyond their means and don’t save” in that our federal government can print money. Admittedly, the government shouldn’t print so much money as to cause inflation, but this ability to create money IS a SIGNIFICANT way that our society is “different from those families who live beyond their means and don’t save.”

Martin McCue
1 year ago

Any government benefit you get is never going to be free. It is paid for with taxes – yours or someone else’s – now or at some point in the future with an added or new debt burden. (Thus, the famous DC saw, to justify new spending programs: “Don’t tax you, Don’t tax me. Tax the guy behind the tree…”)

And there are also usually other ripple effects when the government decides to send people money – diluting or changing pre-existing good incentives, cheapening the value of the dollar, causing other types of inflation, hiding real costs or pretending they don’t exist, and not insignificantly, leaving one of those really bad internal feelings that maybe what is really going on is that someone just wants to buy your political loyalty with something that looks a lot like a bribe.

Last edited 1 year ago by Martin McCue
Philip Stein
1 year ago

It seems to me that there isn’t enough public discussion of the adverse effects of current debt on future generations. The specter of the Social Security and Medicare Trust funds running out of money in a few years and our reluctance to reform these programs is a good example of this.

As the national debt grows ever larger, the country may soon need to borrow yet more money just to pay the interest on all this debt. Much of the burden of debt repayment will fall on future generations who will get no benefits, just higher taxes to pay for benefits that previous generations enjoyed.

Certainly, “free” is not free — it can come with significant costs. Who will pay these costs? Indeed, what kind of country will we bequeath to our descendants?

Chazooo
1 year ago
Reply to  Philip Stein

The money is there so far- your President just donated another $20 Billion to Ukraine after last year’s $100 Billion donation. The money mountain is so attractive that people forget about the fact it may end one fine day – that is aka Depression. It’s ok though because the bill won’t come due until you are moldering in your grave.

tshort
1 year ago

Two things:

  1. My wife and I don’t have kids, yet we live in an area in SF Bay area that has very high taxes, and reportedly very good schools. You know what else we have? Unusually high home values. You’re right – you don’t get something for nothing. In this case, if you want to have lower taxes it’s easy – just move to some area well away from the city that has lousy schools and high crime. Homes there are a bargain.
  2. I’m always stunned when I see people railing against free healthcare. Many of these same people turn right around and start complaining about how expensive their Medicare premiums are, or how ridiculous drug prices are.

And in case anyone thinks that free healthcare is a sure sign of the ultimate collapse of a free and fair society and life as we know it, look no further than all of Europe or Australia and NZ for just a few examples of the various ways healthcare for all has been implemented and succeeded. Are they all perfect? No. (As if our current system is??). Do they provide some type of healthcare access for everyone, regardless of income or wealth? Yes.

It’s called civil society. Same thing for taking care of people in old age. Tax the wealthy and those with high incomes? Heck yes. Tax me. I’m good.

R Quinn
1 year ago
Reply to  tshort

I think you are confusing universal health coverage with free health care. Europe does a good job with universal coverage, but it is hardly close to free and all the systems struggle with growing costs, budgets, cutbacks and delivery of services in some cases. In addition Europeans are more accepting of government managing their care directly and indirectly. Something Americans need to thing about if they want free care too.

Philip Stein
1 year ago
Reply to  tshort

Our current health care system is notoriously inefficient with costs rising at rates greater than the rate of inflation. Raise taxes today to pay for ever more expensive health care, and you’ll be faced with raising taxes again in the future to pay for still more expensive health care — an endless spiral of taxes chasing costs.

Instead of simply raising taxes, why not reform American health care to reduce costs and make it more efficient? No doubt there is plenty of fat to be trimmed.

I’m skeptical of health care systems in other countries being somehow better than health care here at home. Foreign citizens may not pay much out-of-pocket for their health care, but they likely pay in other ways, like fewer available doctors, long waits for an appointment or long stays in the waiting room. I still read stories of people in need of some life-saving procedure who die before their scheduled surgery

Last edited 1 year ago by Philip Stein
John Elway
1 year ago
Reply to  Philip Stein

 I still read stories of people in need of some life-saving procedure who die before their scheduled surgery”

Yes, plenty of that in America. People don’t get the health care they need because overpaid CEOs make it too expensive.

R Quinn
1 year ago
Reply to  John Elway

Absolutely not true. CEO pay is insignificant in the scheme of things. And the vast, vast majority get health care they need. Keep in mind too that the majority of Americans have coverage for expenses and NO actual insurance is involved and that includes most employers of any size.

Michele McIntosh
1 year ago

I’m glad to be able to pay taxes that help fund education. I’d much rather live in a society where all are educated, not only out of altruism, but also as a strategy of self preservation.

Chazooo
1 year ago

One of the cornerstones of a great America, “free” public education where you pay for your own education through your property taxes all your adult life. Unfortunately, we may soon see an end to that cornerstone but will have to continue paying for it in addition to paying for private schools.

BenefitJack
1 year ago

All you need to know about “free”! What behavioral economists found …

https://thedecisionlab.com/insights/business/impact-free-consumer-decision-making

neyugn
1 year ago

As I learned in college and this is confirmed by Richard H. Thaler, there’s no “free lunch”. The cost is either covered by you (indirectly) or by somebody.

Last edited 1 year ago by neyugn
Mike Wyant
1 year ago

Geez, my property tax in Georgia is about one tenth that amount.

Nate Allen
1 year ago

If I got a $13,000 property tax bill, I think I’d croak.

Last edited 1 year ago by Nate Allen
R Quinn
1 year ago
Reply to  Nate Allen

And that is for a condo.

Edmund Marsh
1 year ago

You’re right. “Free” is a tempting word, even though I know that when I get something for nothing, someone else got nothing for something that was spent. Yesterday, during a trip, I stopped for a senior coffee. They were busy and the nice lady didn’t charge me. It was free to me, just cost me a smile a friendly greeting, but the cost was shifted to someone else. But it pleased me way out of proportion to the 59 cents I saved over the coffee I bought just now.

Tom Murin
1 year ago

As the late P.J. O’Rourke said: “If you think health care is expensive now, wait until you see what it costs when it’s free.”

R Quinn
1 year ago
Reply to  Tom Murin

Good example. The freer it gets the greater the use and the easier it is to stimulate use – which is a real thing.

But at this point, many employers have gone too far with extreme deductibles creating a real burden for some people.

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