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Show National Enterprise , May 5, 1976 Page Three Who Picks Up the Tab for Americas Lunch Editor's Note: In the second of a two part series, Milton Friedman challenges three myths of American capitalism: demand for government services, the free lunch myth, and the belief that we help the poor at the expense of the rich. Mr. Friedman says they're full of bunk. We thank The Alernative for allowing us to reprint the article. Let me come to another myth: the myth of a demand for government services. We all know that from the 1930s onward there has been an enormous expansion in the scope of government. In 1929, just prior to the Great Depres- sion, total government expenditures at all levels, federal, state, and local, were about 10 percent of the national income Today, the comparable figure is about 40 percent of national income, and even that greatly understates government expenditures in a true economic sense, the control over expenditures by government. In the process of going from 10 percent to well over 40 percent, the myth developed that these expansions in programs occurred in response to an overwhelming public demand, that the government has had to step in because the failure of private markets produced a grass roots demand that government do these things. This is a myth that could not be farther from the truth. Almost every single expansion of governmental activity has had to be sold to the populace at large by misleading advertising that Madison Avenue would blush at. The populace has had to be brought kicking and screaming to approve them. Let me give you the greatest sacred cow of them all, Social Security. In the first place, it has nothing to do with social and-i- t has nothing to do with security. Its an utter misnomer, its a program whereby you , Social Security. Let me give you another simple example. I was in Florida not long ago, just the w eek after Congress had passed a mass transit bill provida in bad tax order impose very ing for billions of dollars to be to provide very inequitable spent in local communities benefits. In the Orwellian on mass transit. There was a language that is used to sell story in the local FTorida paper Social Security, what you and about a proposal to expand I would call taxes are called bus service, which had been contributions. Now tell me, is put up to the local voters three an involuntary payment a years in a row in the form of contribution? But the tax that approval of a bond issue. you and your employer pay Three years in a row it had under Social Security is label- been turned down. Any stued a contribution. If you buy dent of democracy would say an insurance policy or a retire- that that was pretty clear ment annuity or a pension, evidence that it wasnt someand you ultimately get your thing which the populace pension, well thats a benefit, desired. But w'hat happened? you paid for it. But if I get it The newspaper story from other taxpayers, ordinarNow that Washington has ily I would call it a subsidy. passed a mass transit bill well But under Social Security, be able to have that bus subsidies to people are called benefits. Much more fundamentally, the program was sold to the American people w-a-s because the money will come from Washington. That surely was not a case where there was a grass root demand. system MEDICAL COMPUTER SYSTEMS AND RURAL HEALTH SERVICES TM HO WEST FIFTH SOUTH SALT LAKE CITY 14101 fiction whereby everybody believes that he can live at the expense of ever) body else. That is a w idespread myth, The Free Lunch Myth that somehow or other it is This leads me to my next possible to spend money with You myth-t- he myth that govern- - nobody paying for it. ment can spend money at have everybody yelling and nobodys expense. What wras screaming that we ought to really involved in that story have new, bigger, and more was that somehow' the local generous government propeople do not pay out the grams. Where are we going to money coming down from raise the money? Tax busiWashington, somebody else ness. But business corporadoes. Of course, the truth of tions cant pay any taxes. A the matter is that the money corporate executive may sign makes a round trip between the check, but where does he Florida and Washington and get the money? Its either there is a discount taken off from his stockholders or from for cash as it passes through his customers or from his Washington. I dont know how' employees. Unlike the federal many of you remember that government, he doesn't have wonderful description of gov a printing press in his base- - HealthGarde under essentially false pretenses, on the ground that the ordinary people were so shiftless, so little concerned with their own future that unless they were compelled by government to contribute to a fund and paid a pension afterwards, they would all become charges of the state. The situation of the Great Depression when people became charges of the state because of the states mismanagement of the money was presented as if it was typical. It was factually false that, the Great Depression aside, any significant number of people had become charges of the state because they had failed to provide for their own old age. Yet that was the argument that was used to sell ernment by the French economist Frederic Bastiat who said that government is that (Ml) Ml 7711 y Gross Sales 5 (Millions S) 4 3- 2- - 1 1972 1971 7975 1973 1974 1975 Sales Figures Unaudited i This growth pattern is the result of HealthGarde's successful attack on two of the largest problems in medical care today... spiraling health care costs and medical care shortages in rural areas. HealthGarde Lands $269,000 Contract SALT LAKE Symbol, HGRD. CITY HealthGarde Corporation (OTC 1.31, 1.43) has received a contract for $629,000 from the Long Island College Hospital for installation of a major medical computer system. The contract calls for a seven year rent and service agreement of the BSL Clindata 710, a system manufactured by HealthGardes BSL Clinical Laboratory Division in ward, Calif. Hay- HealthGarde acquired Berkley Scientific Labs from the Northrop Corporation April 1. Chief Executive Officer Frank Atmore also announced that HealthGarde has received a $10 million line of leasing credit from United National Leasing in Sioux Falls, South Dakota for the balance of 1976. HealthGarde, too, was recently listed on NASDAQ: ri i i i i i i i i i you Covered i i i i i i i i i i i I With over 1600 stock quotations, news articles,. earnings reports, corporate profiles, market columns and feature stories, the National Enterprise covers the OTC securities market from coast to coast. behind closed doors of We make it our business to know what's going on in the industry-fro- m corporate board rooms to changing securities laws and regulations. We'll keep you posted on the latest developments and abreast of current trends. The National Enterprise gives your investments the kind of coverage they deserve. Please send me a one-ye- ar subscription to the National Enterprise. Enclosed is $18.00. NAME. ADDRESS. CITY STATE. ZIP- - Mail to: THE NATIONAL ENTERPRISE P.O. 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