Monday, 22 November 2010

Idiots guide to a public sector that produces no wealth

Producers produce. Governments consume. And so it has always been.

And if governments continue to grow as they have—consuming in the process their country’s substance—they’re going to bury everyone, consumers and producers alike, in the mountain of government debt that no-one can pay for except the very producers they’re killing off.

Martin Durkin shows how Britain reached this parlous state.

Don’t laugh. It’s all equally true for us, as well.

Government spending is not productive spending; what it spends it spends almost entirely on consumption. Explains George Reisman,

_Quote In the same sense as a housewife, the government is not a producer but a consumer, who is dependent upon producers.  All of its physical production, like hers, is in the last analysis a consumptive production. It is a production which cannot replace the means with which it began ...  a production which leaves the government poorer by the amount of funds it has expended.  In order to continue the activity, resort must be had to an external source of funds -- in the government's case, the taxpayers or the printing press.”

Government spending always has to be paid for.  Deficits even more so—

with interest.

And perhaps even worse than this ongoing consumption of our substance by the grey ones—and the widespread ignorance about the destructive process it represents—is the enormous number of bright, intelligent, resourceful individuals who, instead of working to produce things, head off to work every morning to sit behind a government desk writing reports on how the life of producers can be made more difficult.

And the tragedy is, they think their efforts are worthwhile.


  1. It's amazing how such a simple truth is so hard for so many to accept.

  2. Only one problem with this.. regardless of whether I work in the export or manufacturing sectors ie, the good guy jobs, if I earn less than about $40,000 then I will be a net recipient of Govt largess through Working for Families etc.. so the actual net tax paying base in the private sector is even smaller.

    Similarly, my exporter employer can.. maybe should be seen as receiving an export subsidy in the form of a wages top up in contravention of trade agreements. And, because my topped up wages are considered a tax deductible cost my employer is not paying his full share of tax on his profits.

    Its this interwoven network of WFF and other benefits, tax benefits, big Govt and subsidies that rob us of productivity and rational decisions.



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