No free lunch

There’s a particularly creepy scene in the children’s classic, “Chitty Chitty Bang Bang,” where a diabolical villain lures two kids from their hiding place by walking down the street calling out, “Ice cream. Get some ice cream! Today, it’s all free!”

The children can’t resist and they emerge from a building to get into a carriage where they are promised the sweets. Once inside, the curtains fall from the side of the carriage to reveal they have walked into a metal cage.

It’s human nature to desire what we want without cost. But as the late Nobel economist Milton Friedman reminds us, “there’s no such thing as a free lunch.” Indeed, he published a series of his essays in a book of the same title. His point was simple: Nothing is free; someone — either voluntarily or under compulsion — has to pay.

If offered a Ferrari, I’d probably resist my initial instinct to respond in the affirmative and ask the obvious questions – how much and who’s going to pay for it?

A recent poll from the Public Policy Institute of California illustrates how the “cost” question is important. One of the questions was whether respondents thought that “the state budget situation in California — that is, the balance between government spending and revenues — is a big problem, somewhat of a problem, or not a problem for the people of California today?”

Regrettably, the question lacks context and clarity. One respondent could believe that the budget imbalance is a big problem because California isn’t taxing enough, while another could believe it’s a big problem because of overspending.

Another question asked, “do you favor or oppose . . . providing another round of stimulus checks with $600 going to Californians with incomes under $75,000 and an additional $500 going to those with children?” Not surprisingly, without some background on total cost and who would pay, an overwhelming majority of adults (70%) say they are in favor.

The same was true with the next question: “Do you favor or oppose . . . assisting Californians who fell behind during the pandemic with money to pay overdue rent and utility bills?” Big majorities — over 75% — support this wealth transfer. Here again, the question of who would have to pay wasn’t asked.

And that’s why we found the next question on single-payer health plans so intriguing. According to the PPIC poll, the majority of Democrats favor a single-payer state system while an overwhelming majority of Republicans are opposed. Majorities across regions and demographic groups are in favor, but if raising taxes is required, support falls below 50%. We find it interesting that on the one question where the “free” stuff could come with a tax increase, respondents put on the brakes, even for a program that is widely supported in progressive California.

The lesson here is that when it comes to big government spending and higher taxes, the better voters are informed, the less inclined they are to support such efforts. Even when it comes to raising taxes on groups that are not popular — such as demonized businesses – voters are quite capable of understanding the consequences as long as they are given accurate and balanced information. That’s a big reason why Proposition 15, the property tax “split roll” initiative, failed last November.

The reluctance of voters to blindly endorse expanding government — even in progressive California – may also be due to long experience. Thomas Jefferson once wrote, “The natural progress of things is for liberty to yield, and government to gain ground,” or as President Gerald Ford said, “A government big enough to give you everything you want is big enough to take away everything you have.”

Jon Coupal is president of the Howard Jarvis Taxpayers Association.