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What the Feds and Bernie Madoff Have in Common

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Tags Taxes and SpendingU.S. Economy

10/07/2014Brandon Dutcher

Through the years, Bernard Madoff, the convicted ponzi schemer who defrauded his investors, “generously” donated millions of dollars to charity — cancer research, hospitals, theaters, schools, and more. At least one of these charitable organizations invested with Mr. Madoff, where the invested funds disappeared.

But Madoff is not the only one who gives money to people after first taking it from them. Today’s political leaders win votes and plaudits by giving goodies to little Johnny, but they don’t bother to tell little Johnny that they’re putting it all on his credit card.

School is now back in session, and “thousands more students could be eating school lunch completely free,” Jake Grovum reports for Stateline, “thanks to a four-year-old federal program that is finally expanding to all 50 states.” (Finally!)

“The expansion comes through the so-called Community Eligibility Provision, passed by Congress and signed into law by President Barack Obama in 2010 as part of a broader school nutrition measure,” Stateline reports. “It opened the door for districts with free or reduced-price lunches to offer the meals to every student at the school, at no cost to them — no application necessary and regardless of household income. Under the community eligibility provision, the federal government pays for only a share of the expansion, leaving states to pay the balance.”

Stateline adds that the ultimate cost to taxpayers “is a question mark hanging over the program. The Congressional Budget Office estimated in 2010 that more than 2,200 schools would participate by the end of the decade, at a cost of more than $100 million. CBO estimates the entire National School Lunch Program will cost $11.9 billion next fiscal year.”

But of course Congress and President Obama don’t have $100 million, and they certainly don’t have $11.9 billion. Indeed, according to the Treasury Department, the nation’s total public debt now exceeds $17.7 trillion. In other words, Washington has to return $17.7 trillion, as author Mark Steyn puts it, “just to get back to having nothing at all.”

Our political leaders are not unlike Mr. Madoff, who has admitted that his investment firm paid investors “with money that wasn’t there.”

Here in my home state, the CBS affiliate in Oklahoma City reports that the “U.S. Department of Agriculture is providing free meals at school for 52 sites within the Oklahoma City Public School District. Qualifying schools are able to provide free breakfast and lunch to every student, not just those who qualify for free and reduced meals.”

The CBS affiliate in Tulsa, perhaps likewise unaware that there’s no such thing as a free lunch, reports that thousands of kids in Muskogee “are getting free lunch and breakfast, no matter how much money their families make, as seven Muskogee schools are now serving up free meals to everyone.”

Free meals to everyone. Yet another small encroachment by the welfare state — weakening the family by taking over another of its functions. This development should be lamented; instead, it is celebrated.

After all, now parents “don’t have to worry about affordable meals for their kids,” gushes Kim Hall of the Muskogee Public Schools. “They can just eat free breakfast and free lunch.”

One Muskogee parent says school officials told him “they were giving back to the community.” Of course, Mr. Madoff also gave back to the community — even giving generously to a program for underprivileged students.

In the news stories I have seen, reporters have interviewed government officials about this new giveaway and, naturally, have gotten quotes from pleasantly surprised parents. As George Bernard Shaw taught us, “a government which robs Peter to pay Paul can always depend on the support of Paul.”

For its part, Stateline did at least acknowledge the fiscal realities, reporting that “in some cases, the idea of expanding a safety-net program to all students — regardless of their financial situation — struck some as irresponsible.”

Stateline quoted one Fort Wayne, Indiana, school district spokesman as saying, “There is a certain percent of people who feel this is an overreach and the federal government shouldn’t be paying for all these kids to be eating and that parents need to be responsible.”

Journalist Roger Friedman once noted that Bernie Madoff “liked to spread around” his ill-gotten gains in order to “make himself look good.” This, of course, is reprehensible.

But when his credit card bill comes due, little Johnny will discover that it’s no better when the government does the same thing.

Image source: Peter J. Roberts.

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