Obama’s Support of Social Programs

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Concerning Obama’s belief that welfare frees us, I posit this explanation, and I think some or all of it applies to some others who share his ignorance and attitude. They have other attitudes as well, but I won’t go into that. Obama is viewing Social Security, Medicare, Medicaid, food stamps, unemployment insurance and the rest of these similar programs as insurance programs. He doesn’t understand economics at all, as is evident in all he ever says about economic matters. In this case, he doesn’t know that the government is not administering a set of insurance policies in which people subscribe payments and take actuarial risks. Instead, all that’s going on is forced payments followed by redistributions tied to criteria that superficially make them look like insurance policies. He thinks that the risks have been pooled and thus reduced for the person getting the insurance, and in this sense the person is “freed” from the risks. But he doesn’t realize that if subset F of people are actually freed from these risks and do not pay the actuarially fair price collectively, then subset B of people must bear those risks, because together B + F produce the available income that is the foundation of the taxes and redistributions. If risk is reduced for F, it must necessarily rise for B.

Even if Obama understands any of this, I think he has an even deeper misunderstanding. He thinks there is a free lunch. He thinks that funds can be taken away from set B of people (and also from the F’s) without any costs or effects on the behavior of the Bs and the Fs. He clearly thinks there is a net plus of these programs. Freedom, as he uses the term, is not freedom as libertarians construe it. Like Roosevelt and so many, many others, Obama thinks that freedom has something to do with having goods, and having opportunities, and having risks, worries, problems and obstacles removed. One more fallacy of his is that when he thinks in terms of US, that is, all people collectively, he somehow thinks he can glide over the fact that “we” are not in any sense uniform.

Even Obama, if pressed, would have to admit that there are limits to these taxes and redistributions, and even he would, if pressed, have to admit that there is a point beyond which they are destructive. However, for him that point might be at a tax rate of 90 percent for a large part of the population. This wouldn’t bother him because he thinks that people who make a lot of money don’t really deserve it. He thinks that the government and something called “society” deserve the credit for that wealth and have a right to take it.

8:28 pm on January 21, 2013