A Free Lunch Is a Myth

By Isabella Agrusa

9/9/2020

There is no such thing as free. The belief that a free lunch exists is purely a myth. Milton Friedman once explained free lunch as "the belief that the government can somehow spend money at nobody's expense." The myth of free lunch is blatantly false since there is always someone paying for it, the citizens. 


Currently, there is substantial support, especially among the younger generation, for free government programs, like free healthcare and free college. Although they may seem free, there is an implicit cost. In order to fund these programs, there must be an increase in income: taxes. The only way to fund all of these programs is through heavy taxation on goods, businesses, and citizens. When a tax is levied on a good, the consumers pay it. When it is placed on a business, either it is the employees who pay it, since there is less money for wages and benefits. Or the cost of goods may increase due to the loss of funds to be put towards researching new methods to increase productivity. Citizens lose a part of their disposable income when taxed. 


However, another issue presents itself when the tax revenue is spent. It is impossible to fund every single project that is asked of Congress. It all boils down to opportunity cost. When making one decision, you lose the opportunity of another. For example, Congress may have two million dollars left to spend, and they must choose whether to fund road repairs or local busing systems and by making one choice, it costs you the opportunity to have the other. 


The aforementioned can be applied to just about any decision made in everyday life because all choices have an opportunity cost. While most of us will not be making our federal government's budget, the opportunity cost is incurred when deciding what programs to fund. By choosing one option, it is a lost opportunity for something else. We cannot fund everything because there are not enough resources, like money—but that doesn't seem to stop the government from spending anyway—to be given to all proposed programs due to scarcity. We simply cannot print more money. If we were to, it would increase the level of inflation, diminish the value of our money, and increase the cost of goods. There is a limited amount of money the government has to spend on its budget, with its main source of income being taxes. 


About Isabella

Twitter: @BellaAgrusa

Instagram: @bella.agrusa

Isabella currently attends Michigan State and will graduate in 2024.


#Socialism #America #Capitalism

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