TANSTAFL, What is Unseen, One Easy Lesson

In this case, what Obama and his defenders want us to see is very direct and simple. They want us to see the beneficial effect of government employment, the people who would prosper by bringing home a state or municipal paycheck. What they want us not to see are all of the private-sector jobs that haven't been created.

This has a direct partisan goal, of course, which is to draw our attention away from the current administration's most conspicuous failure. But it also reflects a deeper ideological agenda: a suspicion of private-sector economic activity as being driven by greed and profit, while public-sector employment is noble, selfless, and public-spirited. So they naturally lavish more concern on the latter than on the former. Never mind that public employees can become a special interest of their own, cashing in at the expense of others, as voters from Wisconsin to San Jose have discovered. Consider, rather, the moral inversion of this perspective: those who consume wealth produced by others are assumed to be good, while those who actually produce the wealth in the first place are painted as the bad guys.

http://www.realclearpolitics.com/articles/2012/06/21/is_this_the_end_of_socialism_in_europe_114550.html

If you have not read Bastiat's "Broken Window Fallacy" or Hazlitt's "Economics in One Easy Lesson" you do not understand what makes the world turn.  At least, that's the way it looks from my insignificant viewpoint.  It is startling how vacuous the common debate appears, once one grasps the Bastiat/Hazlitt point, which is the economic version of Newton's long ago observation in physics, which I recall as:  "Every action has an equal and opposite reaction." 

This same concept was captured by one of Milton Friedman's simplest profundities: "There's no such thing as a free lunch." 

What happens when a group of folks comes to belief this is such a thing as a free lunch?  Which is to say they no longer consider what is unseen?  Which is to say they believe they need not consider the equal and opposite reaction of their action of employing a public sector worker?

British Prime Minister Margaret Thatcher famously said (in a radio interview that the problem with socialism is that you eventually run out of other people's money to spend. This has been formalized as the Thatcher Line: the point at which the burden of government begins to overwhelm the ability of the private sector to pay for it.

(The Thatcher Line isn't my coinage, by the way. I read it somewhere else, but I can't remember who wrote it, and Google offers no help.)

The Thatcher Line explains the recent wave of reforms on the state and local level. While President Obama complains that state and local governments have been laying off workers, he has apparently never bothered to ask why they can't afford to hire anyone. It turns out that it's not because state and local governments have no money. It's because spending on government employees naturally tends to expand faster than the ability of tax revenue to pay for it.