by Jacob G. Hornberger 
It?s funny to see liberals harkening back to Franklin Roosevelt?s New Deal as a model for how the federal government should deal with the nation?s current economic woes. Liberals just don?t get it: It?s because of the socialist revolution wrought by FDR?s New Deal that America is suffering its current economic distress.
A recent example of New Deal nostalgia is an op-ed in the August 12 issue of the Washington Post entitled, ?Imagining a World Without the New Deal? by David F. Weiman, where the author points out all the things that Americans would not have had but for the New Deal. Weiman mentions such things as Social Security, cheap electricity, increases in federal jobs, and roads, bridges, dams, and water-and-sewage treatment plants.
In pointing out the things that FDR brought into existence, Weiman is guilty of a fundamental fallacy, one pointed out long ago by the French free-market advocate Frederic Bastiat and later by American 20th-century economist Henry Hazlitt. The fallacy is what Bastiat described as ?that which is seen and that which is unseen.?
Consider a simple example. Suppose the federal government builds a new community center in, say, Newton, Iowa, the state where the presidential caucuses will be held next January. On the day of the grand opening of the center, President Obama arrives with his entourage and gives a glorious speech, pointing people?s attention to their new center.
?Look at this beautiful center I have brought you,? the president declares. ?I am pleased that not only did I create jobs for your community, I also have provided you with a nice place to have your community events.?
Residents in Newton break out in wild applause. ?Thank you, Mr. President. Thank you for giving us this center and for creating jobs in our community.? Newspaper editors and reporters provide glowing news reports and commentaries on the president?s ingeniousness, generosity, and benevolence. The president immediately soars in election polls.
What everyone (except libertarians) misses, however, are the unseen consequences of the community center. You see, what most liberals overlook is that the federal government is not a fountain of wealth. Why, it?s not even like a private business, which gets its money by providing goods and services to people who are willing to pay for them.
The government gets it money by force, through the process of taxation. It confiscates wealth, and it imposes fines and imprisonments for anyone who refuses to permit his money to be confiscated.
Let?s say that the community center cost $10 million to build. So, to build the center, federal officials must have first taken the $10 million from people in the private sector who earned it. That means, obviously, that the people from whom the money was taken no longer have it. If they had the $10 million, they would spend it, save it, invest it, donate it, or some combination thereof. They would do something with their own money.
Suppose, for example, the people from whom the $10 million was taken were going to purchase new cars and new suits, remodel their homes, and donate to their churches. That would have meant increased revenues for people in those sectors. The car company might have built a new showroom and hired new salesmen. The clothing manufacturers would have expanded staff and inventory. The construction industry would have hired new workers. The churches would have installed new pews.
But none of that happens, obviously. The reason? The $10 million never gets saved, spent, or donated by the people from whom it is taken. The people in the car, clothing, construction, and church sectors never see it. Those sectors never experience the expansion the money would have brought them because the consumers had their money taken away from them so that it could be used to buy that community center.
Thus, obviously it?s much easier for President Obama to point people?s attention to the community center and say, ?Look what I have brought you? than it is for people in the automobile, clothing, and church sectors to say, ?Look at what he deprived us of.?
Liberals need to understand that the federal government cannot create wealth out of thin air. With its socialist projects, the most that the federal government can do is confiscate and redirect the use of people?s money and other resources into what are usually unproductive, dependency-producing, dead-end types of projects. The principle was true for the New Deal. It was true during for Lyndon Johnson?s Great Society. It holds true today under Barack Obama.
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Jacob Hornberger is founder and president of the Future of Freedom Foundation.
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Love how articles like this focus on the "evil social services" that are draining our economy rather than the other even larger drains on our economy. Namely the war on drugs, the war on terrorism, and of course, the rampant corruption throughout most "regulatory" agencies which allow corporations in every industry to circumvent fines. Oh and there's the whole thing of the super wealthy paying no where near their fair share in taxes, along with the tax free haven of wall street that cycles millions of imaginary dollars daily.
Instead its those aweful aweful social services, helping people who need financial assistance, that is destroying the economy.
War mongering, industrial complex supporting, hogwash. Lets clean up our government and end the fruitless wars draining our economy before we remove one of the last bastions of generosity in our republic.
They're all one in the same. Government as an institution is the problem. Giving some select group of people the right to violate the rights of others in order to protect their rights is a logical fallacy. All forms of government are just forms of dictatorship, the only difference in a republic or democracy is you get to vote on who the dictator/dictators is/are.This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the Digital Millennium Copyright Act (found at the U.S. Copyright Office) and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.
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