Commentary: We all receive government assistance

The Myrtle Beach Sun NewsAugust 16, 2012 

I live my life in a way that makes life harder for poor people because the government has favored me above them.

It’s true of most of us, though many people feign ignorance or deny that reality.

But I won’t.

Every year, I claim the mortgage interest deduction on my tax returns.

And every time I do – along with millions of other middle-class and rich homeowners – it inflates home prices higher than they otherwise would be.

Take away the mortgage interest deduction tomorrow, and the pool of potential buyers will shrink considerably.

And when that demand disappears, home prices will fall, maybe even more than they did during the height of the recent recession.

Once prices drop low enough, those who couldn’t afford the inflated prices will be able to buy.

There are other ways the government favors those with more over those with less.

And contrary to popular belief, it is not confined to millionaires and billionaires who use the tax code to pay an effective tax rate that is lower than many in the middle class, or large corporations who receive breaks at the expense of small businesses.

Conservative economists have been making this point for years: When the government steps into private enterprise, it distorts the market in ways seen and unseen.

It’s true. The government dollars being spent to increase traffic in Myrtle Beach businesses does it as well.

So did the $1 billion package of goodies South Carolina handed to Boeing to convince it to build a plant in North Charleston.

So does government intervention in health care. About 90 percent of the people with insurance plans through their private employer – like me – are being subsidized by the government, which impacts health costs.

Medicare has a bigger influence on costs than maybe anything else. It is a government program so entrenched elected officials would spark a riot if they ever seriously considered getting rid of it.

Conservatives, liberals and independents would join forces and march on Washington to save it.

Many of the people who rail against a poor person’s potential dependency upon food stamps and welfare are also being subsidized by the government – and that doesn’t even include the benefits we share from good infrastructure and a public education system that turned the United States into a super power.

There are good reasons for the government to step in this way. Before Medicare, private health insurance was outrageously high for seniors. When we age, we become riskier clients because our bodies natural decline. The private market charges us for those extra risks.

The option was to continue allowing seniors to wither on the vine or step in.

The mortgage deduction has helped to create a robust housing market, which has created countless jobs and more economic activity, which helps us all. And it provides an incentive for people to work harder to become homeowners, which helps stabilize neighborhoods and communities.

Boeing attracts suppliers, sparking job creation even beyond its plant.

Many financial experts say a lower long-term capital gains tax rate convinces more people to take risks, an important ingredient in the growth of the economy.

Each of those arguments has holes – some of the benefits are outweighed by hidden costs – but also show that the government didn’t grow this way to make Americans less free and more dependent.

A constructive conversation about the size of government can be had, one in which we hash out where its intervention is helpful and where it’s harmful, or where it was good policy years ago but bad policy today.

That can’t happen until more of us admit the benefits we receive – and refuse to relinquish – in the current system.

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