MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘FREE LUNCH’

Google Is What We Would Have Called ‘A Mooch’ in Third Grade – LewRockwell

Posted by M. C. on February 17, 2020

Maybe it was buried in a EULA somewhere, and maybe there was some implied consent when you picked up his toy. Maybe you even said a cursory “yes,” when he said “If you play with my toys, you have to be sure to follow the rules.” And you probably should have asked more questions.

But the kid with the cool toys really could have been a lot more straightforward with you and your buddies.

https://www.lewrockwell.com/2020/02/allan-stevo/google-is-what-we-would-have-called-a-mooch-in-third-grade/

By

You’re in third grade. You and your buddies have a friend with some cool toys. He lets you play with them at recess. You guys have a good time. It gets to be lunchtime and you and your buddies pull out your brown paper bags. Everyone starts to dig in, except for the kid with the cool toys. He didn’t bring a lunch. He wants some of yours and some of your buddy’s and some of your other buddy’s food.

Well, he’s been a lot of fun to play with, and he brought these cool toys with, and you don’t want him to go hungry, so you guys all share.

But then the next day the same thing happens. And then the same thing the day after that. And then he starts to get a little entitled about what’s for lunch, like your lunch is suddenly his or something.

So then one of your buddies calls him out on this behavior. And the kid with the cool toys starts saying how it’s all in the EULA, and how it’s your fault if you didn’t read the EULA carefully enough, and how there is implied consent to all that is in the EULA, as soon as anyone starts playing with any of his toys.

And the three of you look at each other like, what is this kid talking about.

You thought he was a nice guy doing you a favor, and enjoying your company. You had a really nice time together. Then once you let down your guard, he comes and tries to collect on the bill he thinks you owe him, but he never brought up to you before that moment.

Not only is it a surprise to you when he brings up this ulterior motive that he had in mind the whole time, but it also feels kind of creepy the way he turned your time together into a gimmick by which he could profit.

And nothing against profit – you buy the marked up baseball cards, at the baseball card store down the street, instead of riding your bike all the way to the mall, where they are cheaper. You understand profit; you like certain conveniences.

The kid with the toys knew all along that this was the plan, and he told you plenty about the toys here, and about his toys at home, and about some people he knows who like his toys, and a lot of positive stuff about himself, but in all of that marketing, he never bothered to share with you the most obvious information that he knew you would want to hear.

That’s a lie of omission.

Maybe it was buried in a EULA somewhere, and maybe there was some implied consent when you picked up his toy. Maybe you even said a cursory “yes,” when he said “If you play with my toys, you have to be sure to follow the rules.” And you probably should have asked more questions.

But the kid with the cool toys really could have been a lot more straightforward with you and your buddies.

Providing a free lunch isn’t really part of the deal when you go play with some toys that someone brought to recess. It’s kind of weird really. And if someone wanted to change the rules of the game to something weird, to be anything but straightforward about that change is really, really weird.

It’s a creepy thing to do to someone.

And by the next day, the kid has a nickname, and you sure don’t want to play with his toys anymore. By the day after that, the whole class knows his nickname, and word’s gotten around about his creepy EULA, and what he does after you’ve played with his toys.

And before you know it, he’s crying to his mom, who’s a lawyer, about the fact that they all call him “a mooch,” and won’t play with him anymore. Then his mom talks to the rather judicatory principal at your school, who works for the government, and the teacher gets involved, and she’s a lot like a police officer – this teacher – with how she acts, and before you know it, his creepy EULA becomes what the authorities around you say you’ve got to comply with, and they don’t let you call him a mooch anymore, and they tell you how important it is to share with others.

But no matter what those authorities all say, every 9 year old in that class knows a mooch when they see one and knows that there’s something off about that kid.

Be seeing you

free lunch

Free lunch.

 

 

 

 

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

The High Price of a “Free Lunch” | Mises Wire

Posted by M. C. on September 7, 2019

Two of the greatest periods of GDP growth in the US, 1820 to 1850 and 1865 to 1900, had deflations of 50%. Deflation should be hailed instead of being scorned as it is currently by most professional economists and central bankers.

https://mises.org/wire/high-price-free-lunch

One of the Ten Commandments is “thou shalt not steal,” and theft is generally condemned in most religions, yet our religious leaders and followers have essentially turned a blind eye to government theft.

Based on a policy of envy, Bernie Sanders, for example, has bluntly stated he intends to tax the rich to fund his programs, as though the word rich itself justifies theft. The current crop of other democratic candidates is offering a beehive of free programs without any real discussion on how to pay for them.

Three Ways to Pay for the State

Governments can finance these programs in only three ways: (1) direct taxation of its citizens, (2) borrowing money, and/or (3) printing money. Few citizens understand the nefarious effects these methods can have on their own well-being. None of them provide “free” money.

The first and most obvious way to raise money is by direct taxation. When you pay your income tax or sales tax, you are brutally aware of how much money is being taken out of your own pocket. If the government only uses these taxes to fund itself, it would quickly run into serious taxpayer opposition; would we still be in Afghanistan today if the government took your flat-screen TV or cell phone to pay for soldiers half a world away?

The second way to raise money is by government borrowing. When the government borrows, it takes money from people who are trying to save, promising a seemingly riskless asset: a government bond. The government has displaced money that would normally have been used to invest in a new computer or machines or buildings, or even a consumption good as a new car. When the government borrows, there are real sacrifices today, not in some distant never existing future when the debt is repaid. There are real resources that are extracted from the economy in the now and present. This is a good example of what is seen, what is not seen and what should be foreseen. Government borrowing finances government consumption which crowds out investment spending that would normally have created a more prosperous economy.

Government Crowds Out Other Borrowers

Now, government borrowing is normally also constrained. The more the government borrows, the greater the demand for loanable funds and the higher the rate of interest. Here again, taxpayers who are also trying to borrow to buy a car or a house would soon realize that it’s the government borrowing that is crowding them out of the loan market. Of course, there is a point of no return for government debt, when the markets doubt a country’s ability to repay this debt — as Greece discovered in 2010.

Now, the obvious question is, how can the US or any other country run record budget deficits and have rock-bottom interest rates at the same time? The answer is the third way by printing money, or often called “quantitative easing.” This way also impacts the government’s ability to borrow.

A simple example will make this path of funding clearer. Suppose an economy has $10 to purchase 10 pencils. The price of the pencils will be $1 each. If the price increases (inflates) to $2 each while the supply remains constant, there would be 5 pencils that can’t be purchased, but if the cost of the pencils were reduced (deflated) to only 50¢ each, there would be people holding $5 looking to purchase nonexistent pencils. Supply and demand in the marketplace give us a price of $1 per pencil. Now suppose the economy is growing and is now producing 20 pencils. Because there are now more pencils in the supply pipeline, the price of pencils will drop to 50¢, a deflation rate of 50%. Deflation here reflects society pushing back the constraint of scarcity. It cannot eliminate scarcity or all prices would be zero, but this deflation shows an increase in the standard of living for everyone.

Two of the greatest periods of GDP growth in the US, 1820 to 1850 and 1865 to 1900, had deflations of 50%. Deflation should be hailed instead of being scorned as it is currently by most professional economists and central bankers.

Now, returning to our initial example of $10 and 10 pencils. Suppose the government prints another $10 to buy pencils but our supply of pencils has not changed. The money supply has doubled so we now have $20 chasing 10 pencils. The price for each pencil will inflate to $2, and the government will be able to buy 5 pencils by cutting the purchasing power of money in half. In other words, you have been robbed or taxed 5 pencils because your cash can now purchase less than before.

If at the same time the economy is growing, then we would have $20 chasing 20 pencils and the price of pencils would have remained at $1. There is no inflation but the rise in real income, exemplified by the 10 pencils that would normally have gone to the citizenry, has been siphoned off or stolen by the government. To a large degree, this is what has been happening since we moved to a fiat currency system in 1933. The central bank has been keeping the CPI in check but has created massive asset inflation, a massive redistribution of income from the poor to the rich and has been a major contributor to financing ever-growing government expenditures.

As Lord Keynes said,

By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but at confidence in the equity of the existing distribution of wealth.

Many in the lower rungs of the economic ladder blame their declining real incomes, and other inequities, on capitalism. They should, instead, be blaming the central bank.

When the government borrows, it increases the demand for loanable funds, and with a fixed supply, interest rates should normally rise. If at the same time the central bank is increasing the supply of loanable funds by printing money to buy government bonds, then interest rates will decline if the increase in supply is greater than the increase in demand. Here, we are basically monetizing the debt. Worldwide, this printing has currently driven interest rates to zero or into negative territory. Using the economy as an excuse, central banks have been monetizing government debt, alleviating any pressure on governments to control their spending.

Continuing from Keynes,

As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

Many economists are currently predicting we will experience another devastating recession in the US. Will we repeat the errors of the past by trying to fix a credit crisis with more debt? Or will we find a permanent solution by ending central banking, fractional reserve banking, and the government’s ability to borrow and print money? If we do, any future government spending would require an immediate and clear sacrifice on the part of the citizenry: unlike what politicians would have you believe; there is no free lunch.

 

 

Posted in Uncategorized | Tagged: , , , , , | Leave a Comment »

A Free “Baloney” Lunch

Posted by M. C. on July 20, 2011

Gary North does some math with respect to the debt limit debate

Posted in Budget | Tagged: , , , , | Leave a Comment »