The Last Stand: Government Costs and Benefits

How many people are actually aware of the real size and scope of our federal government? At one point I did a little thought experiment just to try to point out the vast sums of money our federal government has to work with. One quarter of the entire production value of this country goes to the government every year, which means 25% of the time we are working, it is solely so that the government can spend that money. I started to write out some of the actual benefits we get from the taxes we pay, but I had to stop when I thought, we get “national defense”, but what this really amounts to is spending money so that defense contractors stay in business while we kill many of our own youth and practice at best questionable “defense” tactics in foreign countries. Yes, we need defense as a nation, but what are the real costs for defense, versus what we are paying now? We are also supposed to get  secure border for the money we pay in taxes… obviously the product is not delivered.

We pay the government to bureaucratize education, so that America is one of the worst developed countries at educating our youth. We pay for the DHS who calls my friends terrorists, and conducts illegal searches on highways; this department supposedly to keep us safe despite the redundancy of already having the NSA, FBI, CIA, ATF, DEA and more federal police—and right now I won’t even get into why some of these organizations are more of a threat than a safety net. We pay the federal government to help the poor, enough so that every household in poverty in America could get $60,000 per year, yet we still have poverty. We pay the government to research new energy, and help get companies off the ground, yet energy loans are given to political donors whose companies go out of business, and never contribute to the quest for clean energy.

So what exactly are the actual benefits we get from the government? In the real world we assess if something we buy is worth the price. We perform a quick cost benefit analysis to say “do I need this new boiler enough to justify the price?” The old one will have to be replaced within 5 years anyway, and the energy savings will pay for itself in 10 years. Are we unable to do this with our government? Is there some quality about a government that exempts them from the same cost benefit analysis that we perform, sometimes unconsciously, in pretty much every other area of our life pretty much at every point of every day? Should I make coffee this morning, or buy some on the way to work? Well it will cost more to buy it, but taste better and save time; oh I’m out of cream anyway, I’ll just buy it.

But somehow when it comes to government, many argue a take it or leave it approach. Apparently we either need to accept the fact that we spend $4 trillion a year, or any dollar we reduce spending by will be harming the minority of people who actually benefit from the federal government. So if we reform or reduce welfare, food stamps, and housing benefits, the argument is made that we are only hurting single mothers and children. If we reduce our defense spending, people who work for defense contractors will be out of a job they depend on. If we make Social Security viable for future generations, or offer an opt out option, then the elderly will suffer. Anywhere you cut federal spending, you can point to someone who suffers from the loss of a job, the loss of a subsidy, or the loss of a government service. Is this what prevents us from doing our cost benefit analysis?

In the real world when a company’s sales go down, they need to downsize in order to remain a viable company. I always feel bad for individuals, but I think we can agree that in business it is glaringly obvious that you cannot spend more than you take in. We understand that if a company does not sell as much as it used to, some jobs are going to have to go—theres less work to be done, and not as much money to do it. Yet we still spent tax dollars so that GM workers could keep their jobs, and we still spend tax dollars so that certain government workers can keep their jobs, even if their job is redundant or unnecessary. It has become about providing employment, while people have lost track of the very reason anyone was ever employed in the first place, to fulfill a need. That is what economics is about, supply and demand, and the only reason a job should exist is because there is a demand for it. We must decide as a country if we are willing to work 3 months out of the year, to maintain jobs just for the sake of that employee having a job.

Think about this in perspective: From January 1st until March 31st of every year you go to work so that government employees can have a job. For those three months, you have to work so that a person who works for the government can continue to go to work and get a paycheck. You are taking money from a productive endeavor, supplying a demand, providing products and services that people need, want, and choose to trade their work for (with dollars as the placeholder for our labor); and funneling that money into providing a job for the sake of a job. A job that does not produce, or provide an in demand service. You can always create a supply, but if there is no demand, it is just a job for the sake of the job holder—charity.

You may be saying that I am ignoring the government services that actually are in demand, or are productive. But what I am talking about is a $4 trillion a year jobs program where some Americans work to produce things that keep our economy and country going, in order for 25% to be spent so that someone can keep a job. Without a government, necessary products and services, things in demand would still be available and get done, which is why I have not addressed which government programs are necessary. But I am not even arguing that we should just eliminate government, I am trying to demonstrate the waste of labor that goes into supporting a government the size of a quarter of our economy.

Of course I am saying this all in the context of the “government shutdown”. Could this be the wake up call, the last stand, for America to realize it cannot support unproductive jobs? It is hard not to feel bad for individuals, and it is not wrong to feel bad for people put out of work. But what we have to realize is that for every government job that is actually unneeded (no demand), a job that would have been in demand does not exist. Eliminating the wasteful government expenditures would not eliminate jobs indefinitely, it would reorganize the economy into more productive labor. Who will reorganize it? The people spending the money.

Remember those three months per year you work and produce so that government employees can have a job? Those three months of work would not be for the government, they would be for you, and whatever you feel the need or desire to work for, and the jobs would be created accordingly. That extra money (what you got for your labor) could be spent on: a bigger house (builders, painters, developers), it could be a vacation (pilots, hotel managers, restaurants), it could be investments (bankers, brokers, real estate agents), maybe you want to take a bit better care of yourself (yoga instructors, doctors, personal trainers, psychologists), or take a few more classes you never got to in college (professors, instructors, teachers), finally eating the way you want to (farmers, botanists, nutritionists, chefs), or spend a little more for the finer things in life (brewers, distillers, designers, decorators, party planners, carpenters) and perhaps you want to reduce your workload in your free time (house cleaner, landscaper, tutor). And apart from the jobs mentioned, all these things require organization and distribution, which is where most white collar jobs come into play. And if you don’t know what to spend that money on, (while it sits in the bank providing people with loans) a company will devise a new product to entice you with, like a more efficient fuel, a labor saving device, information processing and delivery. This is how labor, jobs, the economy was meant to be organized, supply and demand. Not by thinking up a supply and then forcing people to demand it (the force in this case being confiscation of money through taxes).

So instead of looking at this “government shutdown” as a childish fight, or prideful stubbornness, or political showboating, consider if it could be that certain politicians are taking a stand. Taking a stand against reckless spending on unproductive labor and jobs; taking a stand for rational policy, for cost benefit analysis, for logic rather than emotion. You may think it is more noble to take a stand for that physical person who has lost their job, but consider how much harder it is to take a stand for that invisible person who never had a job; a job that got shipped off to a government employee to sit in an office in a building to do something that no one needs. You worked to pay for that office, that building, that salary and the invisible man never got his productive job, where he would be contributing and providing and fueling our economy, not draining it. The costs are mounting, with no hope of reduction. Are the benefits mounting? It’s time America perform our cost benefit analysis for our government.

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