There Is No 'Free' Lemonade

This column is a true story -- every word of it. And I think it very appropriate to consider with Fourth of July, Independence Day spirit still lingering.

BY TERRY SAVAGE Modified: July 14, 2010 at 11:21 am •  Published: July 14, 2010
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they handed it to him, he again asked, "So how much is it?"

And the girls once again replied, "It's free!" And the nanny looked on contentedly.

No wonder America is getting it all wrong when it comes to government, and taxes, and policy. We all act as if the "lemonade" or benefits we're "giving away" is free.

And so the voters demand more -- more subsidies for mortgages, more bailouts, more loan modification and longer periods of unemployment benefits.

They're all very nice. But these things aren't free.

The government only gets the money to pay these benefits by raising taxes, meaning taxpayers pay for the "free lemonade." Or by printing money -- which is essentially a tax on savings, since printing more money devalues the wealth we hold in dollars.

If we can't teach our kids the basics of running a lemonade stand, how can we ever teach Congress the basics of economics?

Or maybe it's the other way around: The kids are learning from the society around them. No one has ever taught them there's no free lunch -- and all they see is "free," not the result of hard work, and saving, and scrimping.

If that's what America's children think -- that there's a free lunch waiting -- then our country has larger problems ahead. The Declaration of Independence promised "life, liberty, and the pursuit of happiness." It didn't promise anything free.

And that's the Savage Truth!

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. She is the author of the new book, "The New Savage Number: How Much Money Do You Really Need to Retire?" To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com.

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