2013-02-12

What Can We Afford?

To almost unanimous world condemnation, North Korea conducted a test of nuclear weaponry. Meanwhile, the government of Iran confirmed the conversion of enriched uranium into nuclear reactor fuel. As the so-called "first world" winds down its involvement with nuclear weapons and energy, the poorest countries on the planet heighten their interest in it. Why?

I tend to look toward the economic answer first. Once fully developed, nuclear programs are extremely efficient. No other type of electricity generation produces as much electricity for as little effort. No other form of weapon unleashes as much destruction as a nuclear weapon.

The problem, though, is that the nuclear program must be fully developed in order for use of nuclear technology to make economic sense. If a single company or entity of some kind were solely financially responsible for the development of either a nuclear weapons program or a nuclear energy program - without the aide of government subsidies - the project would never get off the ground. The considerable cost of the project overhead would preclude these technologies from existing in the real world.

But, with the clout of substantial public debt, the impossible becomes possible.

This is true of all sorts of things, including "social security," "universal" health care, wars on terrorism and drugs, and so forth. There is a long list of government undertakings that are government undertakings precisely because they are impossible to justify under the conditions of essential liberty.

Please understand that these sorts of social programs are not impossible merely because "the rich does not want to pay for them." There isn't enough money across an entire generation of human beings to make social programs affordable. In order to fund them, money must be deducted from future generations and transferred to the current set of recipients. This is what government debt actually is.

Most of my readers understand this already, but sometimes it can be beneficial to articulate thoughts like these in the interest of clarifying the matter.

The point here is that, considering the fact that US government debt is higher than US gross domestic product, and growing at a rate several times greater than the growth rate of GDP, it is becoming ever-more-obvious that destructive government spending cannot really continue like this. We're running out of the future generations' money. Those generations are entering the workforce with record-low job prospects. The machine cannot continue as is.

The tools employed by governments to restrict our freedoms - from expensive war machines to welfare traps - can only be paid for on a short-run basis. If the government cannot capture adequate freedom over the course of a few decades, the empire collapses, and the people get to keep most of their freedoms. The fact that the government is finally started to fold under the weight of its expenditures is good news for libertarians. If we can make it through this rough patch, then we will retain most of our freedoms for the next couple of generations.