T-A-N-S-T-A-A-F-L

The following article was written by Gary DeMar of American Vision Ministries. Orignally published online here.

The first rule of economics is TANSTAAFL: There Ain’t No Such Thing as a Free Lunch.1 While something might appear to be free (e.g., education, healthcare, etc.), there is always a cost to someone. Ignore this law, and all economic hell breaks loose. Of course, politicians believe they can ignore and even break any law because they consider themselves to be gods. They believe they can create economic prosperity ex nihilo, “out of nothing,” simply by legislating it. Most Americans don’t care about these economic realities any more than the politicians who propose them because they are the first-in beneficiaries.

When Social Security was implemented, the maximum amount any one person paid into the system was $60 per year—a total of two percent from employee and employer of a maximum $3000 per year. Today, the percentage is 12.4% on $97,500 per year because TANSTAAFL is coming due. Those who are receiving these benefits are not concerned because someone else is paying for them. Economic realities and ethics be damned. Yes, ethics. For example, families who are sending their children to the “free public schools” are using the money of their neighbors to pay for their children’s education. They assume since they elected people to do this it is morally acceptable. We’ve grown accustomed to this type of logic.

Consider Social Security. The Social Security Administration estimates that those born in 1877 (and retiring in 1942) got an average of 36.5 percent real rate of return on their Social Security contributions, while those born in 1950 (me) will receive on average a 2.2 percent return. Those born in 1975 will get 1.8 percent return. It’s even worse for future workers. The government should have seen this coming when Ida Fuller received her first Social Security check. She paid $22 into the program and received more than $20,000 in retirement benefits.2

In 1935, there were 45 people paying into SS for every one person receiving benefits. Today, that ratio is about three to one.3 Is it any wonder the SS has been described as the “world biggest chain letter”?

“The World’s Biggest Chain Letter—Unless You’re the Government”: Social Security is a pay-as-you-go retirement program. Those paying in now are paying those receiving benefits now. Social Security works like a chain letter. Some people have described SS as a “Ponzi scheme,” named after Charles Ponzi, a con artist who bilked people of a lot of money. How did he do it? He would tell people that he would pay them a huge return on their investment within a few months. Then he would take their money and pay off the previous investors. It worked great for the first ones to (unknowingly) get in on the scheme. Ponzi then used his early “investors” as testimonials to attract new “investors.” After a time, the number of investors ran out, and so did Ponzi with their money. Ponzi had worked the “pyramid scheme”: the people at the top (those who get in early) receive the benefits that are being paid in from those at the bottom (those getting in late). The following appeared in Parade Magazine (March 28, 1976): “Social Security is a wonderful plan. People say it’s going bankrupt. Don’t believe them. It works. I know. My uncle reached 65 and he sent in the appropriate forms. In a week he received a wonderful letter: “Dear Mr. Gold. Welcome to the Social Security System. Attached is a list of ten names. Just send $100 to each name on the list and retype up a new list with your name at the bottom. But remember, don’t break the chain!’”4

If a private insurance company operated this way, the directors would be arrested, tried, and sent to prison for a long time. Democrat fundraiser Norman Hsu was charged with a “massive Ponzi scheme.”5 One of the biggest beneficiaries of his contributions is Hillary Clinton. It’s Clinton who is proposing that every newborn should receive $5000. Other politicians are pushing for some form of “universal heath care.” Who will pay for this? The same people who are paying into Social Security to keep the Ponzi scheme alive—the most productive members of society. You and I know them as “the rich” who are already paying the majority of taxes. Hsu couldn’t keep the scam going because he couldn’t force people to keep contributing. Politicians can by the force of law.

Just because politicians can create economic programs does not mean they will work. Putting people in power so they can take money from your neighbors and give it to someone else does not make it right, whether they are Republicans or Democrats.

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1 The phrase has been attributed to science fiction writer Robert A. Heinlein in his 1966 novel The Moon Is a Harsh Mistress. Two of Heinlein’s best known science fiction works are A Stranger in a Strange Land (1961) and Starship Troopers (1959). Heinlein’s political philosophy was anti-socialist (“correct morals arise from knowing what man is—not what do-gooders and well-meaning old Aunt Nellies would like him to be.”) and anti-communist (“All the work one cares to add will not turn a mud pie into an apple tart.”).

2 Gary North, Government By Emergency (Ft. Worth, TX: American Bureau of Economic Research, 1983), 8.

3 James M. Pethokoukis, “Boomer Burden,” U.S. News & World Report (January 17, 2005), 46.

4 Quoted in North, Government by Emergency, 4–5.

5 “Fundraiser Hsu charged with pyramid scheme” (September 20, 2007)

Communism, Common Property, and Coming Judgment

Several years ago, I was flipping through the television channels and I landed on TBN. There stood Paul Crouch telling how he went to China (to try to get permission to broadcast) and told leaders in Beijing that early Christians were "Communists" because they sold all their processions and had everything in common. He remarked how the Chinese leaders were very interested in that revelation. Mr. Crouch was referring to passages in Act 4 and 5 where we see the early church in Jerusalem selling all their property and laying it at the feet of the Apostles:

Now the full number of those who believed were of one heart and soul, and no one said that any of the things that belonged to him was his own, but they had everything in common. And with great power the apostles were giving their testimony to the resurrection of the Lord Jesus, and great grace was upon them all. There was not a needy person among them, for as many as were owners of lands or houses sold them and brought the proceeds of what was sold and laid it at the apostles' feet, and it was distributed to each as any had need. (Acts 4:32-35 ESV)

Even though, in my opinion, Paul Crouch isn't qualified to be a spokesman for Christianity, what he said about the early church bothered me. At first glance, it looked as if he had a point. I really began to wonder, were the Apostles and members of the early church Communists? If not, why did they do this? Should we do the same today? Some have advanced this theory. In fact, according to a Catholic Traditionalist named Patrick Odou, (in this article) certain authors have used Acts 4:32-35 to support Distributism and other Socialist notions.

Unless I missed something, I don't see anything in the Bible about Christians selling everything and having common property in other cities. Could there been some other underlying reason for the saints in Jerusalem do this? If so, what would it be? I've thought about it for a while and I now believe the behaviour of the Jerusalem Christians may have had quite a bit to do with the judgment Christ warned would be poured out on Jerusalem within their generation:

But when you see Jerusalem surrounded by armies, then know that its desolation has come near. Then let those who are in Judea flee to the mountains, and let those who are inside the city depart, and let not those who are out in the country enter it, for these are days of vengeance, to fulfill all that is written. (Luke 21:20-22 ESV)

History records that our Lord's words were fulfilled in A.D. 70. when the Romans sacked Jerusalem and leveled the Holy Temple. An estimated 1 million Jews were slaughtered. However, those who were Christians heeded Christ's words and fled for the hills during a brief withdraw of the Roman armies. Because the Christian Jews fled the city, it has been said that not one Christian was killed during the Roman siege.

Think about it... If you knew -for certain- that your city would be totally leveled and everyone killed within your lifetime (see Luke 21:32), wouldn't you be making preparations to leave? I don't know about you, but I certainly wouldn't be worrying about buying more real estate, adding onto my house, or investing my money in municipal bonds!

They knew judgment was coming, therefore they began liquidating their assets. Their love for one another was their motivation for pooling their assets -instead of each taking his money and moving to another town. By selling off everything, they were able to care for the poor and needy among them and had nothing tying them to the city when the Day of Vengeance finally arrived.

I was actually surprised to find that I'm not the only one holding to this theory. In the aforementioned article by Patrick Odou, Odou quotes St. Thomas Aquinas who held a similar view:

“Now, the first way, that is, for all to live in common on the proceeds of possessions that are sold, is one which will work, but not for a long time. So, the Apostles instituted this way of living for the faithful in Jerusalem, because they foresaw through the Holy Spirit that they would not remain together for long in Jerusalem, both because of the persecutions to come from the Jews and because of the imminent destruction of the city and its people. As a result, it was not necessary to provide for the faithful, except for a short time. Consequently, when they went out to other peoples, among whom the Church was to be established and to continue to endure, there is no account of their establishing this mode of living” (Aquinas, Summa Contra Gentiles, Book 3, Part 2, chap. 135, 2, p. 182)

In conclusion, you can't use the Bible to support any Communistic or Socialist agenda. Paul Crouch was wrong to tell the Chinese officials that the early Christians were Communists, though he may have scored a few points with them on his broadcasting proposal.. Paul Crouch -like many in our day- does not understand the eschatological significance of the destruction of Jerusalem. The saints at Jerusalem were not Communists: they simply believed Christ's warnings about the judgment to come!

Soli Deo Gloria!

Money, Banking and the Federal Reserve Video

Have you ever noticed that your nice crisp one dollar bill buys less and less every year?

Once upon a time, a dollar could buy an acre of land outside Orlando Florida, but now it won't buy a 20 ounce Coke at a gas station. In the video below, you will learn some economic history, the reasons why our economic system is broken, and what it will take to fix it.

The video is really long, but I found it very interesting and educational!



I found this video posted on the Puritanism Today Blog.