In Utah, a debate is currently going on related to whether the Utah government should give “scholarships” of tax money to those not in the public school system, thereby allowing them to pay for private school or homeschool. Some people feel that the government saves money when kids aren’t in the public school system, but the families of those in private school or homeschool still pay the taxes. Due to this, some want the money that would have gone to public school to go instead to help pay for the other types of school selected by the parents.
While it can be appealing to have additional money come into our bank account, there is a reason to be extremely wary of situations where the government offers money.
Money is becoming the root of modern regulation, allowing the government to regulate more than it could before. The Founding Fathers established a system of checks and balances to put limits in place on what the government could regulate, but money is proving to be a way to circumvent many of those limits.
Consider the lessons learned from Covid-19 so far. The federal government issued a variety of mandates concerning vaccinations. Some of these were upheld by the Supreme Court and some were not. Notably, the vaccine mandate that the Supreme Court upheld related to health care workers.
Basically, any healthcare entity that receives federal funds through Medicaid or Medicare has to follow the vaccine mandate imposed by the federal government. In other words, entities that received federal funds were subject to the political whims of the President, as the President is allowed in some situations to say what “guidelines” or “requirements” are associated with those funds.
It hasn’t always been this way though. As the federal government grew in size over the years, the Supreme Court became more and more involved in telling Congress and the President “no” to various laws that were passed. Education, for example, is an area that Congress does not have constitutional power to directly regulate. So then, why is the federal government so involved in education?
Well, in the early 1900’s, the federal government convinced the states in America to amend the Constitution. The federal government had passed an income tax law prior to 1900, and the Supreme Court struck it down as unconstitutional. So, following this Supreme Court decision, the Constitution was amended to give the government power to institute an income tax with the 16th amendment.
With the power to tax income, the federal government was able to collect far higher amounts of taxes than before. With extra money in the treasury, the federal government started returning the money to the states, but only if the states followed the associated ‘guidance’ or ‘requirements’ for receiving the funds.
In the 1930’s, the Supreme Court heard a few cases on these issues. Ultimately, the Supreme Court concluded that Congress has the power to tax, and that Congress has the power to spend that tax money for the “general welfare”. So, according to the Supreme Court, Congress can choose to spend its money however it feels will promote the “general welfare” of those in the United States.
So, starting with things like Social Security, the federal government began returning money it had taken from the states with the income tax, so long as states passed laws and set up programs that were required to receive the money. No state was required to do so, but since unemployment was so high and so many people were struggling, states quickly signed up.
It is the same with education. The federal government began using some of the tax funds to help states fund education. No state was required to accept the funds, so technically, the federal government wasn’t passing laws that had to be followed. They only had guidance that a state could follow to get the funds or reject and not use the funds.
The Supreme Court determined that this type of government action was constitutionally acceptable. Since that time, federal and state governments provide funding to a wide variety of causes, entities, and people. However, Justice Butler in the case of Steward Machine Co. v. Davis prophetically stated:
“The provisions in question, if not amounting to coercion in a legal sense, are manifestly designed and intended directly to affect state action in the respects specified. And, if valid as so employed, this "tax and credit" device may be made effective to enable federal authorities to induce, if not indeed to compel, state enactments for any purpose within the realm of state power, and generally to control state administration of state laws.” Steward Machine Co. v. Davis, 301 US 548, 616-17 (1937).
In other words, he saw that the federal government could usurp all power over the states through the use of money it took from the states.
Since the Supreme Court allows the federal government to take our money and then return it to us with strings attached, the federal government can regulate virtually anything it wants, even if the Constitution does not allow it to otherwise. So long as an entity or state does not have to take the funds, the government can put almost any requirement or stipulation on receiving the funds that it wants to.
Of course, if the rules are too onerous, people won’t take the money. But, if states get used to the money, such as with education funding, it is very difficult for the state to stop accepting the funds if requirements change at any point.
In the corporate world, the concept of the “golden handcuffs” refers to this type of situation, where the lure of money keeps a person tied to the company or their job, even if they hate the job.
Since the government can regulate so much when it gives money back to people after having taken it from them, the power of the government can increase significantly. And, nobody blames the government. Instead, people simply say “you have the freedom to not take it, so what’s the big deal?”
The government is essentially buying our freedoms from us. When it does, it distorts the free market. Hospitals that do not take Medicaid or Medicare will significantly struggle competing with those that do. States that do not accept federal funding will either have lower amounts to spend on their students or they will have much higher taxes in the state. Families that do not take state money for private education will soon be unable to afford private education because the cost of private education will increase to the level funded by the government.
When the money starts to flow, it creates a strong competitive disadvantage to those that do not take it. They can’t keep up with the others as well, and the market diversity starts to languish, creating cookie-cutter type entities that all follow the same governmental regulations.
Currently, Utah’s proposed “Hope Scholarship” will pay money, as a scholarship, to private schools, thereby helping more people in Utah to be able to afford private school. While the Hope Scholarship may not start out as having many strings attached to its funds, it will give families that take the funds additional advantage over those that do not.
Also, the scholarship funds will enable private schools to charge more, which will lead to price increases, again making it harder for those that did not take the funds to be able to participate.
Ultimately though, the most serious concern is that as soon as the government starts funding something, it can start regulating it. People left the public schools to get out from under the government’s hand, so the government is now looking to buy back its ability to regulate the children outside of the public school system. Why do we want to open up those outside the system (the families, students, and private schools) to government regulation that they are working to leave behind?
Ultimately, it is interesting to see that this situation was prophesied of around 2000 years ago. In the Book of Revelation, John discusses the “mark of the beast”, a symbol of significant evil. Interestingly, John does not say that the government forced people to take the mark through oppressive laws. Rather, it says that the enforcement mechanism for causing all people, “both small and great, rich and poor, free and bond, to receive a mark” was that “no man might buy or sell, save he that had the mark.” Revelations 13:16-17.
It is important to understand that John foresaw that freedoms would be lost because we would be shut out from buying or selling. In other words, we would not have to take the mark, or the money, but if we didn’t, we couldn’t buy or sell, or have a way to live.
While this article is not equating the Hope Scholarship or other government programs to the actual mark of the beast, it is suggesting that there is a serious danger in further entrenching the power of the government to return money it took from us, as it further gives the government more power to regulate us.
Private schools will be the recipients of a lot of the scholarship funds. What happens when the private schools can only exist due to the government funds involved? When the government then says that all funds can only go to private schools that require vaccinations, or that teach CSE, or that require classes on subjects the school morally opposes? If people have grown reliant on the funds, they will not have much of a choice, especially since the market will be too distorted to have kept other options alive.
So, while the receipt of funds today can feel exciting, it is important to remember that the government is buying our freedoms from us. If the Founding Fathers were willing to give their lives for freedom, are we willing to forego some of the riches of the world to help keep the government’s power in check?