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Is Government the Answer?

May 18, 2012 in Economics 101, Politics

Is Government the Answer?
For many things yes, government is the answer.  It provides for the common good, protects us from our enemies, even from our fellow citizens.  Helps provide order; prevent chaos, a safety net for the poor, for those that are unable to fend for themselves.  It does a great many things that can reasonably be accomplished in no other way.  But does it try to do too much? and in  doing so, does it crowd out the innovation of the private sector?  In trying to do more, does it insure that we get and keep less?

There is little question but that the government and our leaders generally try to do the right thing… But remember, there is nothing that government ever does or gives that did not take from someone else.   By the defnition, the more the government does with one hand, the more it must take with the other. Our government takes from our left pocket puts part of it in our right pocket and we feel grateful…

So much of the taxes we are paying are hidden in the price, that the government is becoming like a clever con man and we the naive dupes. .   We always see what it does, (the bridge, the building, government jobs), but we rarely see the damge that was done.  i.e. the unintended consequences; the jobs that were lost due to being taxed or regulated out of business.  The Jobs that were never created because the weight of regulation dissuaded the “boss” from even starting the business.  How tough is it?  Try to open a lemonade stand! 

Government is good.  It is necessary, but in trying to do  ALL and protect ALL from Everything, the result is that it hurts everyone It slows economic growth, prevents job creation, encourages government dependency, changes who we are as individuals and as a nation.

Many will disagree with what I’ve said above.  If so, just honestly ask…

Does Government have limits?  Can it or should it, try to solve ALL problems?  Does it ever violate the law of unintended consequences?  In trying to do good in one area, can it unleash a greater harm somewhere else?  Is it really the government that spurs economic growth, create jobs for societal economic well being?

Many think that the answer is always more government jobs; more government employees, more people working, spending money, spurring the economy, etc…   That sounds reasonable, but if more government funded jobs are good for the economy, why don’t we all just work for the feds or the state?  That’s basically what the USSR did.  If I remember right, they folded.

Or… does that economic philosophy bring into play the law of unintended and even unseen consequences?  In creating a job for Bill (that we all see and applaud), does it unintentionally and unseen, destroy the job of Angela and Tom?

Is government really the engine of economic growth or is its most beneficial function to get out of the way and let the entrepreneurial drive of individuals create new businesses and more jobs?

What is the role of government?  Is it to guarantee equal opportunity for all? Or is it to guarantee that we all have equal results?   Is it to guarantee cradle to grave security?  But, doesn’t that ultimately, diminish the dignity of the individual, sap their sense of personal responsibility by creating a deep personal dependency on government assistance?  (And who is really paying for that?)  Isn’t that what’s happening in Europe right now?  Spain, Greece?  The governments can’t sustain their entitlement spending and much of the populace has lost their independence.  Are we headed there?  Is that really where we want to go?  Do we want a system in which we are all either dependent on the government or those of us who decide to work are all trapped in equal economic mediocrity?  Equality of result rather than equality of opportunity?

Assuming we DID want government mandated equality of result, is it even actually possible?  Could it even be sustained?  What does history say?  It’s been tried in the USSR and many other socialistic governments.   The result is always eventually the same; a HUGE disparity of wealth, privilege and power for a few.

But, isn’t that what we have in the US?  NO!  We have different results, but in the vast majority of cases, we have similar opportunity.  In the US, the common man, at least,  has the opportunity to better their lives by working for it and EARNING it… in the alternative system, status and “accomplishment” is virtually ALWAYS bestowed through birth or stolen through force.  Is that really better?

Opportunity vs Equality
Each world view has many brilliant people that support it.  I happen to believe that equal opportunity with a social safety net is preferable to attempting to create a society that forces equality of result.  Centralized government making all decisions and taking care of everyone is simply ineffective.  I rarely doubt the nobility of the objectives, I simply see the history of results.

First off, in the history of humanity it has never properly worked.  We’ve seen the failed results of the USSR and Cuba.  We are seeing it now in the bloated government of Greece, wherein, they are on the verge of collapse due to the incredible overspending as a percentage of Gross Domestic Product (GDP).  (the fact is that the US is fast approaching a similar proportion of debt to GNP… this does not bode well).  Government can’t do it all… and when it tries, it fails and usually makes things worse.

Government vs Private Solutions
Contrast the plight of North Korea vs South Korea; in the north, everything is controlled by the government, people are basically property of and “taken care of” by the state.  It can’t even feed itself.  Then look to South Korea, same geography, same resources, same opportunities… the only relevant striking difference between the two?  In one, the engine of progress is government, in the other, it’s the individual.

In North Korea, the state runs everything… and fails.  Whereas, in South Korea, the government is limited, capitalism thrives and so does it’s people and economy.  Is it perfect?  Of course not!  But the differences between the two identically positioned countries is beyond staggering.  Night time satellite pictures of the 2 countries show the north as virtually blacked out, the south looks like a Christmas tree!  See the following satellite picture.  Can you guess which is which?

The Result of Government Control

Korea at Night

That is the difference between a society controlled by a centralized government that thinks it knows best, how to do everything, has all the solutions and makes all the decisions vs a system fueled via free enterprise where progress within the society is the result of the decisions, choices, ingenuity and innovations of MILLIONS of free individuals.  The genius of the US is derived not from bureaucrats but rather from individual citizens.   History shows that more government takes control, the less free and productive citizens become.

What About China?
Abject failure had even been occurring with our “banker”, China.   Economic stagnation was the norm even in China until some farmers illegally “experimented” with the right to “reap what you sow” i.e. capitalizm...

One day in 1978, the farmers got together and came up with a plan to illegally divide the farms up into plots; they all had to give food to the collective, but the farmers that met a certain quota could keep some food for themselves. They then signed a secret contract formalizing the agreement, and included a clause saying that in the event a farmer got arrested for the practice, the other villagers would raise their children. The result of this risky enterprise that season’s harvest was more than the previous five years combined.  Capitalism in action!

When the government eventually got wind of what they were doing, the farmers were hauled in front of officials; but since you can’t argue with results, the government decided that instead of punishment, they deserved praise.  That was the beginning of the economic powerhouse that we now see today.  It wasn’t what government did, it was what they stopped doing… THEY GOT OUT OF THE WAY!    Here is the difference, the incredible growth when it was controlled by people, not government…

Less Government, more progress

Government in action

The graph shows decades of stagnation that continued until the experiment.  What do you think this graph would look like if the bureaucrats still micro manged the economy?  Shouldn’t our leaders take hint?

Fairness
But equality of result vs equality of opportunity, doesn’t that lead to unfairness?  Wouldn’t that mean some would have less and some would have more?  Some would be rich, would be poor?  Yes, but shouldn’t I be able to work 20 hours a day, to give my family a better life?  If I do so,  is it really “unfair” that I actually have more than my neighbor whose idea of a rough day is watching an “Oprah” marathon?

Throughout the ages it has been known and taught that “we reap what we sow”.
History shows that when we reap less of what we sow, we sow less.  That doesn’t make us bad or lazy… just human.

As was stated by one of the original Chinese “capitalist” farmers Yen Jingchang…
“Work hard, don’t work hard — everyone gets the same,” he says. “So people don’t want to work.”

If the system changes so that we reap, whether or not we even get out of bed, won’t most stop “sowing”?  If we receive the same reward regardless of our effort, won’t most do less?  This may seem good for that individual, but it is CANCER to the society.  That is what happened in the USSR, Cuba, N. Korea, was happening in China and is happening now in Greece and other European countries.  Quite frankly, the US is heading down that road.

Simply put, history has shown that wealthier, more productive societies are created when individuals have the “right” to succeed, to progress and to become “unequal”.   I believe that as a society, we always need a safety net… but we also need opportunity.

The questions of where this nation decides to go and the path we attempt to take are of monumental importance!  Where we go will not be determined by what we try and hope to do.  Unfortunately, hope just doesn’t cut it.  It will be determined by the actual decisions we make.

Decisions always have both intended and unintended consequences.  It’s up to each of us to analyze and make sure that we know what they are.  Regardless of our most noble desires and intended destination, if we choose the wrong path, we can still go over a cliff.

As a county, nation, people and world, we have some decisions to make.  Quite frankly, the way that we, as a society answer them will determine what kind of lives and futures our children and their children will have.  We all want the best and brightest possible future for ourselves, our families and friends.  But we have no choice but to live the consequences of our decisions.  This is true of us as individuals and it is true of us as a nation.   We have some decisions to make…

I have a Question for you… Assuming you had the power… What do you do?

10 responses to Is Government the Answer?

  1. I think they should pay their fair share… but define fair share?

  2. When more money is in circulation and not concentrated in a small few everybody suffers even some of the rich. If the people are without money they can’t spend, if they can’t spend the business owners don’t make money and they don’t pay taxes on money they didn’t make. This also drives up the deficit. I doesn’t matter where the money comes from the government or a paycheck the results is the same. When you complain about paying taxes because you think someone is getting your money you are putting yourself in a possible peril because anything can happen to you or the people you love and might need help.

    • There is no question that there is a need for taxation. I don’t even think that were the tax rates are at this point, is that far from optimal. The problem arises when the government thinks that increasing taxes is the solution to everything. It just isn’t.

      Thank you for commenting and don’t forget to share!
      Bruce

  3. I believe that people don't pay enough attention to politics as a whole and complain when we get the wrong choices. All I can say is you have to look at the whole picture in order to be informed. A informed voter is a good voter.

  4. This is just my personal opinion but if Obama is reelected in November it will be like the Titanic backing up and running into the ice burg again. Socialism never worked or will work. Capitalism has worked in this country for over 200 years. No other country in the world has that record, because no other country has ever done what America has done, the way we have done it. I believe we will find our footing again and turn this country into a beacon of hope for the entire world.

    • I couldn't say it better myself.
      It amazes me that we have so much recent history that shows exactly where these types of socialistic, central planning, government knows, best policies lead. In the history of the world, they have never worked and have always ended badly. For years I used the term, "creeping" socialism… socialism in America is now, galloping!
      I understand that a HUGE portion of our electorate simply does not know better. As long as long as their life seem fine, most just don't have the inclination to pay attention. But if they understood what these unsustainable policies are doing to the futures of their children, they might think differently.
      The electorate may not understand… but is IMPOSSIBLE that most of our officials are so naive.

      They seem to simply only care about re election, a nice retirement and the continual basking in the gratitude of the millions that love them for "giving" them OUR money.
      These "gifts" are destroying our economy and our future. As long as the electorate is kept in the dark, this cycle will continue and the future of us and our children is at risk.

      It is imperative that we somehow help people understand what is happening.
      The starting point is that people need to understand this simple truth…
      "Government gives nothing to anyone without first taking it from someone else. PERIOD! It can’t give to me, unless it took from you, your family or your friends."

      Many people don't care about the future, because they won't live in it. They won't be around in 20 years… But their children will!
      If people understand the long term consequences of our current path, most will vote and support policies that are in the best interest of their children's futures.

      Please share this information and have them share it…
      Improving this country's future depends on improving our electorate's understanding.

  5. Interesting blog, Bruce. From what I have been reading, and from what the Prophet George Carlin told us years ago…"we have no choices in this country….. paprer or plastic, isle or window…those are our choices. ". The elections are nothing but smoke and mirrors. Both parties are shills for the oligarchy, both will drag this once great country into neofeudalism. The dems will do it with entitlement giveaways to the poor and the aging baby boomers, while the repigs will give it all to DOD to continue perpetual war, just like Ike warned us. Either way, we will spend more than we take in, print more money, keep adding a trillion to the debt ceiling every couple years.In the meantime, it will be modern day bread and circus…x-boxes, cheap junk food, alcohol, a never ending supply of drugs, the internet, i phone texting, cheap car loans, and no opportunites for our kids to ever obtain the standard of living that their parents ( i.e.folks our age) had. The matrix has even devised ways to prevent us from leaving anything substantial to our kids…absurd hospital costs, caps on health insurance payouts, denying coverage for pre existing conditions, an explosion of retirement homes, reverse mortgages, and a collapsed housing market. All of the middle rungs of the ladder have been removed, one by one. The kids in Auburn who are waiting tables, stocking shelves, …they are pretty much stuck at entry level jobs that pay minimum wage. There is even an insidious layer of for profit colleges, if you want to call them that, that will steer todays youth into high priced, useless pieces of paper that purport to open doors to careers. What a transparent joke that all is, and what huge numbers of uninformed students have taken the bait. In summary, IMHO…this isnt about Romney or Obama, or different economic models…we are all in the Log Ride, and we are all going to get soaked. Just a matter of time, but the outcome is inevitable. Thus…it Dont matter at all who is in the front seat. In fact, I believe the whole Dem. / Republican contest…. all of it…. to be a deliberately engineered distraction from the REAL truth. I mean, wasn't that the BIG lesson that all the liberal, hope and change folks have just learned about their boy Obama. Figureheads..nothing more. Builderberg group, DOD,Goldman Sachs, GE, Exon, B.P…that is who calls the shots…not us voters. Check this website. http://www.theburningplatform.com/?p=35850 . Gigantic Jenga game, IMHO.

  6. I believe we can overturn the present government in November, some people would say the Republican candidate is the lesser of two e veal`s however this candidate was the Governor of Massachusetts when he left office there was a surplus in the state funds, there has not been one since because there is a Democrat in the Governor`s seat need i say more, all he does is spend a carbon copy of the President.I do believe we can win this election in November if those of us who believe in America get out and vote and vote for a free America we can prosper again believe in God and Believe in America

  7. “The problem with socialism is that you eventually run out of other people’s money.”
    ― Margaret Thatcher

    tags: entitlement, government

  8. Regan warned us about Obama

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