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Congress gives out $6 billion for volunteer service

March 20, 2009

H/t to Michelle Malkin. While Congress was busy being outraged over the waste of  $165 million at AIG, they found time to spend another $6 bn.

From CBS News: President Obama, who backs the bill, has pushed expanded service as a way for America to set through the current recession. It would cost $6 billion over the course of five years.

 To make sure we do our volunteering right, the House just passed a $6 billion volunteer service appropriation.

Two main questions.  First, if people are volunteering, why do we need to provide $6,000,000,000 for them? “Volunteer” means free.  Why spend a bunch of money on people who are doing stuff for free? If you’re providing stuff to them, it’s no longer volunteerism. See, when I work in exchange for money, goods or services, that’s called “paid”. The IRS has rules and stuff.

Second. How does volunteerism help end a recession? Let’s say everyone in the country volunteered 20 hours a week. That creates millions of hours of labor that doesn’t generate any revenue for the economy. Or, a more micro example. Suppose 10 friends get together to do a really nice soup kitchen. Poor people should be able to eat well, after all! They buy an old building with a government grant, and then renovate it on the weekends. Then they take turns making the menus, serving, and buying the groceries. Does this add to the economy? No.

But – they had to buy the building, and buy the paint and drywall, and they’re buying the groceries.  Surely that adds to the economy? No, and here’s why. The government gave them the money for the building.  That means that somewhere, money was taken FROM somebody that could’ve bought a building (or a really nice hot tub).  The paint & drywall? That would’ve been bought by whomever refurbished the old building. The food? I’m sure those poor folks were going to eat something, so the money for their food would’ve been spent by someone else. But there’s a bigger economic loss. The 10 people running this soup kitchen have other jobs. Generally, they’re better at whatever they’re paid for. They could’ve spent that shopping time doing someone’s taxes, or doing whatever other skilled task they do. And that combined economic activity would generate MORE for the economy than the soup kitchen. Further, their soup kitchen gives people a disincentive to spend. Why go to Arby’s when you can go to “Chateau du Free”?  A supply of food costing nothing will lower demand for food that costs more than nothing. The net effect of Chateau du Free is lower tax revenue for the government, fewer private sector purchases, and less contribution to GDP.

So, back to Obama’s premise. How will volunteering save the economy?

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