In our last article, many moons ago, we talked about how balanced budgets were a pretty stupid idea.  The reasons were pretty straight forward.

The government has to care for the public, which is why it can’t work like a household budget. Its main revenue is taxes, which no one wants to raise, even though Federal taxes (not state or property!) are quite low. 70% of the Federal budget is made up of military spending, Social Security and pensions, none of which anyone wants to touch, and no one wants to change the tax structure to allow rich people (and more importantly) corporations to shoulder more of the load, even though every other developed nation taxes them significantly more.

On top of that, all the good money-making industries are taken by private business. That’s how capitalism works. Government exists to take on the stuff that we need, but that business can’t make money on.  And the expenses just keep going higher and higher.

I also used an illustration of a butcher shop, to show the dire situation that the government is in. What if you owned a butcher shop, and someone forced you to get rid of your stock and only sell horse meat? Everyone else in town is a regular butcher shop of course. Your bills don’t get any cheaper just because you’re offering horse meat, but you can’t raise your prices, because there’s only a small pool of people willing to eat horse meat, and they aren’t going to pay a lot of money for it.

Mmmm! Government bonds!

Mmmm! Government bonds!

What do you do? Well, there are two obvious options.

arsonist1.     You burn down every other butcher shop in town.

Well, there’s no government equivalent for that, right? It’s not like Congress can’t just decide that it’s going to take over a business and ban all competition in that field for the good of the country, right? Because that’s exactly what the United States Postal Service is. It is the legislative elimination of competition.

In truly socialist countries, the government just takes over certain industries and keeps anyone else from participating. As time goes on, and as the pressure builds in this country, this might be an option on the table. In the last five years alone, there has been a possibility of the government taking over both the banks and at least part of the auto industry. Whenever there is a bailout there is a possibility of a takeover. And there are plenty of sectors that could use a bailout.

What if the pressure mounts and the government takes a look at an ailing, but necessary industry… say like airlines? Is it really fair-fetched to see government taking over air transportation? After all, the Constitution is pretty clear that Congress regulates interstate commerce or anything that affects it, and the airlines certainly qualify.

And it’s not like anyone is going to really fight for the airlines.The entire process of flying anywhere is pretty awful. There’s waiting, lousy service, hidden fees, and general inefficiency. Frankly, it already feels like a government agency, the only thing government intervention could do is drive the prices down.

American Airlines

The other option?

2.       You sell other stuff in your shop.

Okay, so maybe your meat isn’t any good.  So you stock up on alcohol, cigarettes, lotto, videos, whatever it takes to get people in the store. You provide your customer every service you can to justify your prices.

And that’s what socialist governments do. Their taxes are higher. The only way they can get away with high taxes is value added services. So they provide free health care, robust worker’s rights, all kinds of stuff. But that would never happen here, right?

But listen to the deal. Insurance costs are rising way above inflation, way above your paycheck, way above anything. Let’s say a couple years from now, if health care is still an issue, you realize that between insurance and taxes you’re paying out 40% of your income. But that doesn’t include co-pays, deductibles and things like that.

Now the single feature that distinguishes the American health care system from the rest of the world, is the speed with which you can go to a specialist. But have you tried to see a specialist lately? Because  of liability issues, it takes a really long time.

Like most Americans, you’re an at-will employee, which means when you go to work, you can get fired for pretty much anything (like being hot) and there’s not a lot you can do about it. You get maybe two weeks of vacation, and maybe if you’re at the same job long enough you get three weeks. You don’t own a business, and there’s not much chance of you moving up the corporate ladder.

If the government offers healthcare to everyone the price plummets, because insurance prices are based on how many people participate, and EVERYONE is participating now. Your taxes have been recalculated and with health insurance included you pay about – 40%.

But that’s it. No copays anymore. You just walk in the pharmacy and get your meds. No hospital bills. It takes a while to see a specialist, but then again, it always has. As an employee, you can’t just be fired anymore. If there isn’t a very good reason, your employer is in hot water.

You have six weeks of vacation and that’s if you’re part-time. Six weeks and you don’t take a pay cut.

Are you saying that the average American wouldn’t even consider that deal?

Make no mistake, the sane answer to the current budget crisis is to raise Federal taxes. Socialism has its own set of problems, problems that don’t mesh well culturally with America. But by putting pressure on government with a completely insane idea will only breed other insane ideas.