More Scams - And Some Questions

Yet another huge scam has hit the news! This is about UP during 2004 - 2007, while Mulayam was chief minister. Some 35,000 - 2,00,000 crore (1 crore = 10 million) rupees worth of grain (estimates vary) meant for the poor were stolen by State functionaries.

Makes you realise that this "right to food" business is part of our "right to fraud."

Think about it - the huge involvement of our The State in foodgrain: first, they buy up foodgrain at high "support prices" from (rich) farmers; then they store this grain, usually in the open, under plastic sheets; then they transport this grain (now depleted by rats) to government shops all over the vast landmass; then they pretend to sell this grain cheap to the poor... but then, the grain often gets stolen on the way.

All this costs them so much that they have to print money to pay for it.

This causes inflation.

Wouldn't the poor be better off if traders sold them grain? - just as they do all other things, from vegetables and fruit, milk, meat and fish, spices, cloth, mobile phones....

As Bastiat said, socialism is all about "false philanthropy."

I wonder what Bastiat would think about the second piece of news I found - that our The State is pumping in Rs. 1200 crore rupees into Air India next week. This cannot be philanthropy - for the poor do not use Air India. I, for my part, would prefer to call it "loot."

Of course, if Air India was sold off, and civil aviation de-regulated, the poor would benefit - and more poor people would fly. I discussed this the other day.

The Lesson: Socialist politicians can never help the poor via The State. They only help themselves. They end up screwing up State budgets - and this leads to higher taxation, higher borrowing, quantitative easing - and inflation. Private investments fall. Thus, if we want the poor to climb out of poverty, we must put an end to all this "false philanthropy." Let private investments grow - so the poor get jobs. Let there be competitive markets and free trade - so the consumption of the poor improves. Let there be Liberty and Property - so the poor can raise Capital and become entrepreneurs themselves. All solutions to poverty lie in The Market. The State is the primary cause of impoverishment.

This lesson is drummed home by this slideshow I found today - on the miserable condition of the finances of the government of communist West Bengal, a government that hates business and loves to throw money at the poor. West Bengal is the most indebted state of the so-called Indian federation: its debt burden stands at a staggering 2,00,000 crore rupees (1 crore = 10 million). Of whatever revenue it extracts from its poor people, this government spends 97 per cent of this on interest payments on past debt and salaries of present employees. How is this colossal debt ever going to be repaid? How many future generations of Bengalis will be burdened with this debt?

There are an entire host of state governments that are completely broke. UP, Bihar, Orissa, Maharashtra - these are all deep in debt. On the extreme, there are many state governments that depend entirely on Central funds - Kashmir, Manipur, Chhatisgarh, Jharkhand, Nagaland, Tripura.

And as for the Central State - in this year's Budget, they announced plans to borrow Rs. 3,50,000 crore rupees.

Not one paisa of this huge amount of money (which will eventually have to repaid by us, and our descendants) will be "invested." All of this will be "consumed." Rich, poor, middle-class - all will be hurt.

Now, ain't it kinda strange that the man at the top is supposedly an "economist"?

But then, is he a "politician"?

Has he been "democratically elected"? Yet, he is into his Second Term!

Lots of questions to ask ourselves, in this lootocracy.