Contributed by Lewis J. Walker, CFP®
The discussion centered on current controversies over the state of health care in America. The young student, a sincere humanitarian, said, "I think health care is a right." Despite his concern about a basic human need, his comment is symptomatic of confusion over the difference between a right and an entitlement.
The Declaration of Independence asserts that all men have been endowed by nature and God with certain unalienable rights, specifically, the right to “life, liberty, and the pursuit of happiness.” Neither the U.S. Constitution or the Declaration of Independence say a person is entitled to happiness, merely the right to pursue happiness and wellbeing by legal means.
Dr. Larry Arnn is an acclaimed Constitutional scholar and president of Hillsdale College in Michigan. He notes that natural rights such as life, liberty, and the pursuit of happiness make no demands on other human beings other than they respect those rights. But like our well-meaning student, in addition to medical care, we hear demands stated as rights to housing, food, college education, even birth control pills. These are not rights; they are entitlements. For a person to have free health care, food, shelter, or other provisions, they must make claims on other people’s money and resources. These demands cost money, and funding comes not from the government, but from productive taxpayers who must give up something (money and labor) to transfer goods and services to others. Dr. Arnn warns, “This understanding of rights not only sets citizens against each other, but it undermines the whole idea of natural rights.” An entitlement mentality can has a corrosive effect on society. Nothing is really “free.” It is right for citizens to ask how things will be paid for, and what responsibilities should the recipient bear?
True, as human beings we have an obligation, also from God, to recognize the plight of the suffering, poor, and struggling. The holy books of many religions instruct charity as an article of faith. We are to care for widows, orphans, the blind, lame, the starving. Personal charity is a personal obligation. The holy writs also instruct us in personal responsibility, that we are to be diligent in providing for ourselves and those we love and care for.
Financial planning is an exercise in personal responsibility. April 18, 2017, is the tax filing deadline for 2016 returns. You may be gathering documents as you plan to file or request an extension. You acknowledge the obligation to render onto Caesar his due; you also recognize the right to pay only what you are legally required to pay. As you review last year’s results, are you certain that you have tax efficient investment strategies? Can you work with your CPA and financial advisor to minimize taxes and maximize tax incentives?
In terms of private charity, are you efficient in your charitable and philanthropic giving? Are you helping grown children or grandchildren with tuition or other needs? Do you have children or other loved ones with special needs? Trust planning and other aspects of special needs planning may be called for.
For many future needs, whether philanthropic or for the funding of trusts or other estate planning liquidity needs, life insurance done right can be highly tax-efficient. Many of you reading this have old life insurance contracts stuffed in drawers, unmonitored and inefficient assets. Upon analysis we sometimes find underperforming contracts likely to implode at some point, undermining well-intentioned funding goals, even the financial security of beneficiaries. Have you audited your policies lately?
When it comes to the entitlement mentality, America is due an awakening. We are headed potentially for hyperinflation, higher and growth-killing taxes, reductions in benefits, or some combination of the foregoing. The young who clamor for more entitlement “rights” ultimately will have to pay the bill. You only get a free lunch if you take a bite out of someone else’s sandwich. True security, choices, wellbeing, and financial independence, are do-it-yourself projects.
Ask Google how to subscribe to Imprimis, the free publication from Hillsdale College. It should be required reading, especially for high school and college students, and all who care about true freedom and the health of our republic!
“My fellow Americans, ask not what your country can do for you, ask what you can do for your country” ─John F. Kennedy, January 20, 1961. Words forgotten in the clamor for free stuff!
Lewis Walker is a financial planning and investment strategist at Capital Insight Group; 770-441-2603. Securities and advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis Walker is a registered representative and investment adviser representative of SFA which is otherwise unaffiliated with Capital Insight Group. This information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. There is no guarantee that any opinion or suggested possibility will happen.