Why Government Spending Your Money is Bad

The main objection by folks who want the government to remain small is that money in the hands of individual people gets spent faster and better than money taken from those people to be spent at government discretion.   Every single dollar the government spends is a dollar that has been taken from someone and handed to some government agency.  For every $20 an hour job created by government there is one less $20 job in the private sector.  It can’t be any other way.  The government produces nothing.

But the argument is that when folks get scared and hoard their money, the government has to intervene, take their money and forcefully interject that money into the economy.

And fast.

But does it work that way?


The government is slow and ponderous.  And, like all things made of people, it serves its own selfish self-interest.  MY self-interest is to get the best value for my money.  The GOVERNMENT’S self-interest is to get re-elected.  The two do NOT have similar paths.

When Obama passed the stimulus, I objected because it was stealing private economic gains, either today’s or tomorrow’s, and “creating” government economic gain.    But that gain isn’t a 1-to-1 trade.  The government has its own inefficiencies that siphon off much of the stolen private money before it can be injected into the economy today.

The other objection I had was that the government wasn’t going to spend it fast enough.  The economy would have already left recession before much, heck, even a little, was spent.

History is unkind to Obama:

DETROIT—The Motor City has lots of drafty houses and tens of thousands of unemployed people. So when Congress proposed spending $5 billion to insulate homes as part of the stimulus bill, Detroit got excited. The director of the city agency managing the program advertised for construction companies before the legislation even passed.

So far, so good.  But our Hero’s in Detroit have bad news around the corner:

But on the same day in March 2009 that Shenetta Coleman picked up applications from 46 companies, she received an email from the Michigan Department of Human Services telling her she couldn’t award work to anyone.

The problem: Ms. Coleman hadn’t met requirements for her advertisement. Those included specifying the precise wages that contractors would have to pay, and posting the advertisement on a specific website. There were other rules—federal, state and local—for grant and contract-award processes, historic preservation and labor standards.

Ahh yes, government having to face government regulations!  It isn’t about value, remember, it’s about feeding the beast.  But surely these small obstacles could be overcome!

The state Department of Human Services and the Detroit agency exchanged several versions of Detroit’s advertisement before its language was approved. It was January 2010, more than a year after the first advertisement had gone out, before the Detroit agency had a new one to post.

It was another two months before the city awarded contracts. Detroit weatherized its first home using stimulus dollars in March 2010.

March 2010.

With the recession over months ago, homes in Detroit were being weatherized to pull us out of a recession:

Eighteen months after the bill was signed into law, Michigan has weatherized 10,194 homes with stimulus dollars. It has 23,216 more to go before it meets its target.

Not even a third of the money has been spent.

Not fast.  Not valuable.

It’s not that I don’t want money spent, it’s that I want money spent better.  And the government does very few things better.

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