printMy own version of the title’s maxim invoked “zero-sum economics, or parasite vs. host. The larger the parasitical sector gets, the weaker the productive host will grow. The first is sucking the lifeblood of the second.”
Peter Schiff expertly drives home the principle in his latest column:
“The fiscal 2011 budget proposed by President Obama contains $3.8 trillion in federal spending. Think of government as a cancer feeding off the private sector. The larger it grows, the more jobs it kills. Unfortunately, most politicians follow the misguided advice of economist John Maynard Keynes, who advocated government spending as a means of job creation. In reality, government spending merely results in government jobs replacing more efficient private sector jobs.”
Read on about the effects of regulation, subsidies and, yes, tax cuts when borrowing continues apace. As they bay for the tax-cuts panacea, I bet beautiful Sarah and her supporters have not figured out that:
“… a dollar borrowed kills more jobs than a dollar taxed. Therefore, cutting taxes and borrowing the shortfall kills more jobs then [sic] it creates. This is true because jobs require capital and government borrowing more directly crowds out private capital investment than taxes do.”
Bush, I noted in “Deficit Disorders,” cut taxes while “spending like there was no tomorrow—for every dollar that may or may not remain with its rightful owner, the president blew tens of non-existent bucks on brand-new spending.” And, “Each of the morally bankrupt parties has used tax cuts as a decoy to avoid addressing the cause of the deficit: government’s spending more than it steals.”
“In the end, we will become a nation of government employees, with plenty of work but little to show for it.”
It seems that economists are forbidden to mention the most likely outcome. As our productivity approaches zero and our money supply approaches infinity, we can expect our fiat currency to crash, more or less as Argentina’s did. Of course, the crash will be much worse here. I hope to be safely ensconced in the country when all of this hits the fan, and I’ll really feel sorry for those of you stuck in any large American city. I mean, not sorry enough to offer you any help, or anything, but more or less the way liberals feel about Haitian refugees.
Even if government were as efficient as a true free market (not the current corporatist state in the form of GM, Fannie Mae, Goldman Sachs, ADM, SAIC, and other “private” companies that are just public parasites on the stock exchange), it would still be insidious because it would sap away human freedom. Government uniformity stifles innovation (see “public” education) even when it is not corrupt. A governmental entity like Amtrak is subject to top-down political pressure from pressure groups, Congress, etc. Alternatively, free market entities are subject to economic pressure where every consumer with one buck has one vote. The governmental enterprise can seize assets and power to “correct” any flaws – e.g. create more flaws. The market enterprise must adapt to changing conditions, technology, and desires or go out of business.
The classical liberal philosophers believed in a government whose purpose was to SECURE OUR RIGHTS – to life, liberty, and property – and leave us alone for everything else. The government whose function was to protect us from overseas/internal aggression and resolve legal disputes could be funded by a small revenue tariff. The Leviathan Welfare-Warfare state depends on a combination of regulatory taxation, money counterfeiting, and BORROWING.
Myron;
The day when counterfeiting is used to repay debt is the day the government says, “Welcome to the NEXT LEVEL”.
It looks like that day draws unavoidably nearer. We’d better be prepared.
More government equals fewer of everything except taxes and your own personal freedom.