Thursday, December 27, 2012
Socialism v. Charity
By Robert Knight
With the fiscal cliff looming, Washington is looking under every rock for new forms of “revenue.”
Nothing is sacred, not even the mortgage and charitable deductions, which some are recasting as “loopholes.” Ending the mortgage deduction when the housing market is finally showing signs of recovery would be like giving a cancer patient strychnine to make him feel better.
Even worse would be ending the charitable deduction, for the simple reason that this deduction encourages private sector benevolence, which the federal government under Barack Obama treats as pesky competition.
As government grows, the private sector wanes, a situation created by the decline of strong families and abetted by progressive programs designed to make families irrelevant.
When it comes to serving the needy, there are two basic approaches. The first, inspired by Jesus Christ and required in the Old Testament, is sacrificial giving of oneself. This has been the cornerstone of American charity since the nation’s founding, and it remains the most effective way to assist the poor.
The diametrically opposite approach is socialism, in which income is forcibly seized and then redistributed to groups and individuals favored by government officials. Socialism is rooted in the formula from Karl Marx—“from each according to his abilities to each according to his needs.”
That’s a fine arrangement when voluntary, such as in families, churches and private charities. However, when imposed by force—and socialism is always accompanied by force since it violates human nature—it is soft tyranny masquerading as charity.
Since the 1930s, with the advent of the New Deal, the federal government, along with local and state governments, has taken on more and more functions that were handled by families and faith-based charities. Lyndon Johnson’s Great Society sent this into overdrive, and Barack Obama is intent on nailing America to a third-stage rocket into socialism.
Social Security, the largest government income transfer program, was originally aimed at assisting intact families and widows. Now, it’s an ever-growing tax on employees and employers that has driven a wedge between the generations. How? Because in the past, parents had more children partly to insure that someone would provide for them in their old age.
Social Security removed the advantage of having children, since it guarantees income based solely on age (and previous employment). Someone who has no children gets the same amount as someone who had six children who grew up to pay into the system, thus supporting the childless retiree. Children are very expensive, as any parent can tell you. Social Security makes having them less advantageous. Of course, Social Security has allowed millions of older Americans to live in at least minimally comfortable circumstances. Political talk of privatizing any aspect of Social Security is hazardous, and any hint of ending Social Security as we know it is political suicide. Americans have come to count on Social Security, so the challenge is how to sustain it without bankrupting the next generation.
The same can be said of Medicare, Medicaid and many other enormous federal programs. The advantages are obvious, but the downsides are not so obvious – except for America’s $16 trillion-and-growing debt. To pay for all this, the average American family’s tax burden has risen from a mere 2% of income in 1948 to something approaching 40 percent when all taxes are accounted for.
This has forced many mothers into the workplace who would, all things being equal, rather spend the time raising their children. It’s also created a huge market for paid childcare, with the government subsidizing it. Families pay taxes to create a system that offers incentives for them to spend less time with their own children.
On April 21, 2009, President Obama signed a bill, the “Edward M. Kennedy Serve America Act,” tripling the size of the federal government’s paid “volunteer” programs, including AmeriCorps. The plan will spend $5.7 billion over the next five years and $10 billion over the next 10 years, and put 250,000 paid “volunteers” on the government payroll.
Why would anyone think that government involvement would improve volunteerism? On the Senate floor, Sen. Jim DeMint (R-S.C.) warned:
"…Our history shows us when Government gets involved, it tends to take something that is working and make it not work nearly as well. Civil society works because it is everything Government is not. It is small, it is personal, it is responsive, it is accountable.”
In 2009, Harvard economics Prof. Martin Feldstein warned that Obama’s plan to target charities could severely hurt nonprofits:
“President Obama’s proposal to limit the tax deductibility of charitable contributions would effectively transfer more than $7 billion a year from the nation’s charitable institutions to the federal government.”
Taken together, a massive increase in government aid to paid “volunteers” and reducing incentives for charitable giving are a double-barreled shotgun aimed at the private sector.
To read another article by Robert Knight, click here.
Posted by Brett at 11:05 PM