“Nothing Is Free”

December 22, 2008 by Dick.

I never thought I would say this: Cubans understand economics better than Americans.

In 1932 Lionel Robbins defined Economics as “the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”

I think that is not true any more. At least, not here.

Economists should study and report on who produces, distributes, and consumes goods and services, how they do it, and where it happens. The “soft science” of economics allegedly uses empirical data but in reality is now a political exercise. In today’s scientific environment, we know more about Global Warming than we know about the economy and there is certainly more politics than science in the climatology data.

In Cuba, nothing is free, reports the Miami Herald. The Cuban people pay for it [all] with their work.

“A Cuban gets a salary of 500 pesos a month (about $20) and is told that education and healthcare are free,” Uva de Aragon of FIU Research Institute told the Herald last week. “Nothing is free. The Cuban people pay for it with their work.”

What a concept. Health care. Food. Housing. Consumer goods. All related to the sweat of one’s brow.

Despite the media furor, have you noticed that you don’t directly pay for your health care? Most of us don’t. Most of us have “insurance” (or Medicare or Medicaid). When was the last time anyone reading this brought a home-grown chicken to the doc’s office to pay for the visit? Or traded an hour of computer service for it? Since there is a disconnect between the delivery of the service and the payment for same, we don’t care that the cost has spiraled out of sight. The incoming Administration and the Congress want to take over Health Care to save you money. Right.

The Cuban earns 500 pesos a month from the state. The rest of his or her production stays in the hands of the state to pay for that “free” care.

Education has long been publicly funded by land taxes. Since states like Vermont and Florida take those real estate taxes straight to the Capitol and dole out payments to the local schools, there is a disconnect between the delivery of the service and the payment for same; the cost has spiraled out of sight. Now that real estate values (and the taxes collected) have dropped, the Miami-Dade schools will sue the State of Florida for the “lost” revenue. Right.

The Cuban earns 500 pesos a month from the state. The rest of his or her production stays in the hands of the state to pay for their “free” schooling.

Food (so far) hits most Americans in the pocketbook. OK, except for those on Food Stamps. Oh, yeah, and except for the taxpayer-funded farm subsidies that keep prices artificially low. Still, most of us spend part of our paychecks at the supermarket every week.

The Cuban earns 500 pesos a month from the state. No free lunch there, either, since he has to pay for his meals out of the 500 pesos (about $20). It costs most American families more than twenty bucks to hit the Mickey D Supper Club once.

Congress and the Fed believe we can spend our way out of any problem–health care, food, housing, bad loans. That’s probably true if there is enough earned income to tax to do so.

Uh oh.

Congress and the Fed (and apparently the Miami-Dade school superintendent) believe we can spend our way out of any problem by printing more money.

And nobody in Congress has broken an honest sweat in years.

Here’s the reality check. If I take a fine art photograph, print and frame that photograph, and sell that photograph to Joe next door, I will receive cash money which I can then spend in the grocery store or at the gas pump. If I don’t take that fine art photograph, or print and frame that photograph, or eventually sell that photograph to Joe, I will have no money for food or gas or my tax bill.

Any Congress Critter who doesn’t understand that dooms you and you and you and me.

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