EXCERPT From a Nation of Moochers: Have We Reached the Tipping Point?
By 2004, the non-partisan Tax Foundation calculated, 20 percent of US households were already getting about 75 percent of their income from the federal government. Government programs accounted for at least 40 percent of the income of another 20 percent of households, meaning that two in five households were reliant on the government for their livelihoods.[i]
Roughly 60 percent of American households actually were receiving more government benefits and services than they were paying back in taxes and the Tax Foundation estimated that under the 2009 federal budget, 70 percent of households will take in more than they contribute.
"Look at it this way," commented Congressman Paul Ryan (R-Wisconsin), "three out of ten American families are supporting themselves plus - through government - supplying or supplementing the incomes of seven other households. As a permanent arrangement, this is individually unfair, politically inequitable, and economically dangerous."
The numbers, said Ryan, suggest we are approaching or perhaps have even passed a "tipping point." Once we pass that point, he says, “we will become a different people.”
The Sucker Principle
The explosion of free taxpayer cash has its own seductive logic.
If the government is handing out money, the argument goes, who am I to say no? Subsidies for flood insurance for my beachfront villa? Payments to farmers for disasters they didn’t suffer or for crops they never grew? Tax credits to buy myself a new car? Debit cards and free stays on luxury liners? In many circumstances the decision to pocket the free money is completely rational, if occasionally distasteful to both payers and payees. No one wants to be the first to walk away empty handed and everyone hopes they will be able to cash in before the pyramid collapses.
So what is the tipping point for most people?
Think about the common experience of standing in a line, for a bus, concert tickets, or a ride at Disney World. Generally, people will wait their turn, recognizing that the first come, first served system is, if not strictly fair, at least manageable and comprehensible and will in all likelihood result in getting on the bus, obtaining the tickets, or getting on the ride.
The queue is maintained by cultural norms and social pressure. If someone tries to jump the line, fellow line goers likely will object and attempt to enforce the rules. But what if their attempt fails? What happens if not just one or two, but dozens of individuals begin ignoring the line, jumping ahead of others and getting their hands on scarce and coveted tickets or bus seats?
Think of it as the sucker principle: The line remains intact only until those who play by the rules and wait patiently in line begin to regard themselves as suckers.
Now consider what happens when society’s rewards go to those who jump the line and grab the subsidies, transfer payments, and other freebies offers by the government rather than to those who work, invest, and save prudently?
[i] Rep. Paul Ryan, “Should America Bid Farewell to Exceptional Freedom?” Real Clear Politics, April 2, 2010. Note: Congressman Paul Ryan delivered this speech to the Oklahoma Council of Public Affairs in Oklahoma City on March 31, 2010.