SACRAMENTO, CA - California’s budget mess, while bad news for taxpayers, has at least proved educational for those willing to learn the lessons.

California law demands a balanced budget, so with deficits in the range of $20 billion, more than the GDP of entire nations, there is simply no avoiding deep cuts on all fronts. Those with their noses deepest in the trough, particularly teacher unions, are taking out full-page ads in the Sacramento Bee predicting disaster if they are not spared the ax. Students are protesting fee hikes and everybody is posturing as a victim. The process reveals that a great many people indeed are plugged into government largesse. With it comes a familiar world view.

All blessings flow from the government, whose basic task is one of wealth distribution--a kind of Santa Claus. The government is all-wise and holds a prior claim on what people earn. Those on the receiving end have a right to an uninterrupted flow of funds, forever. In this view, when the government cuts taxes it amounts to a gift, while those who simply strive to keep more of what they earn are considered greedy advocates of “trickle-down economics.” Those who want to take more of what people earn are considered champions of something they call social justice. But this is all wrong.

The government produces nothing that people would freely buy in an open marketplace. Money flows from the private sector, the producer of wealth, to the government, a consumer of wealth. The budget quagmire again confirms that a tax dollar cannot travel to Sacramento, go out on the town, then pass on to some worthy recipient undiminished. There is bureaucratic overhead, lots of it. Education funds, for example, must trickle down through four layers of bureaucratic sediment. And in education circles, as we have recently noted in this space, much of it gets wasted and stolen.

The role of the state is to protect life, liberty, and property, not to redistribute wealth, which is what thieves do. Those who want to keep more of what they earn are not greedy. But those who want to take more of what people earn, not to offer any new benefits or services but simply to fix a budget mess of their own devising, are indeed greedy. Those complaining about budget cuts are not victims of injustice or capitalism. They are victims of bad economics, out-of-control spending, and sloppy thinking. All these have consequences, which cannot be concealed.

It is worth recalling that the “trickle-down” tag began during the Reagan Administration as a stick that liberal economists used to attack conservatives. They charged that the government was giving out all sorts of favors to the wealthy, in the hope that some would eventually trickle down to the poor and middle class. John Kenneth Galbraith, who thought the Soviet economy a raging success, explained it on a Firing Line program. It amounted, he said, to stuffing a horse’s trough, in the hope that some fodder would get tossed around for the ducks, chickens, and other little critters. But the way things really work shows that this theory is much more akin to the workings of government than the operations of a free-market economy.

K. Lloyd Billingsley is editorial director of the Pacific Research Institute in San Francisco. He can be reached via email at klbillingsley@pacificresearch.org.