Beware What You Get for Free — It Has Value!

There is a strange phenomenon in our country that needs to be addressed as we reconsider our budget priorities and try to improve our overall social contract and keep peace among all our citizens.

Let’s start with what we pay for. We actually pay for clothing, travel, food, shelter, parking tickets etc. and most of us are painfully aware of costs and rising costs. And many of us spend time in an effort to make our money go further.

What we, in the main, do not pay for directly is: health care provided by employers, many tax breaks such as deductibility of mortgage interest on a primary home, public school education and even Medicare and social security payments, as well as free care in hospital emergency rooms.

Put very bluntly and simply what many [most?] people get for free [or invisibly] they tend to take for granted and therefore do not value it in the same way as what they pay for with their hard earned dollars. Until and unless we can find a way to make vividly clear to most people what they are getting for free and what the money value of those things are, we cannot hope to get realistically balanced thinking into the overall national dialog about government’s budget priorities.

An example which dramatizes this point is a little story. A very bright capable young man employed in a very responsible position in a small privately owned financial company, when confronted with the fact that the medical benefits provided by his employer were to require a 10% employee contribution, simply dropped out of the plan. When asked why, the answer was that his wife’s employer all along had a better plan with no contribution required. As to why he had not dropped out earlier [the annual cost to his employer for him was about $8,000] the answer was it was free and until he had to pony up $800, he figured it could not hurt him to double up. It had cost HIM nothing. His poor judgment caught up with him and he did not remain much longer with that company.

A broad variety of versions of that story occur every day across the whole country. It is not only wasteful; it creates seriously distorted thinking which has far reaching consequences.

It is possible to create algorithms which can estimate the value of the various free benefits many taxpayers receive. Perhaps one way to clarify and illuminate those items and values would be to require taxpayers to calculate -with help from the IRS–what the items are and are worth AND then those taxpayers would be required to pay a small tax on those values to raise some revenue as well as to drive home what their true incomes really are.

Another dimension to this set of issues is education. Many young people who are lucky enough to have family support, particularly for advanced education, are at the same time unlucky enough to not fully appreciate what they are getting and thus sometimes take it for granted to the point that they do not to take full advantage of their opportunity.

There is a simple solution to that problem which would be to require them to also invest, at least in part, in repaying in due course some student loans and/or working at the same time to partially contribute to the costs. There is nothing like parting with money to concentrate the mind to give a person a somewhat different and better sense of ownership in what is being acquired.

The bottom line is simply that what one gets in life for free tends not to be valued. Therein lies the essence of the so-called “entitlements mentality”. We need to surface more of the truth and proceed to make the entitlements more visible and thus more valued.


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