“TANSTAAFL” — the acronym made famous by Robert Heinlein meaning “there ain’t no such thing as a free lunch” — quite succinctly explains what’s happening to the world economy today. Stock markets are volatile at best, the Eurozone is teetering on the edge of collapse, debt-to-GDP ratios are rising everywhere, and good old-fashioned wealth creation has stagnated. The common solution offered by government to these problems is, of course, yet more government, either via regulation, taxation or handouts. Unfortunately, these are the bases of a welfare state, and it is the welfare state that is causing the issues.  No matter how pure one’s motives, or earnest one’s intentions, in order for the state to hand out free lunches, it must take them from lunch producers. After awhile, the producers quit producing, and the state has nothing to hand out. That’s about where we are now.

This isn’t a terribly difficult concept to understand, yet one that is apparently easy to ignore. Governments everywhere operate on the rather childish belief that people will be better off if those governments simply give them stuff. That belief, however, can only be maintained by studiously ignoring the plain fact that governments don’t actual produce any “stuff” — people do. As I wrote a couple of weeks ago: