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Human
Events...
What Big Government Can Do
Four problems that
can only exist if Big Government creates them
by John Hayward
02/15/2011
On Monday morning, President Obama dropped the bloated corpse of a
bizarre, $3.73 trillion budget on the steps of Capitol Hill. It
is a remarkable document, in that it extends the wildly irresponsible
spending and Big Government devotion of Obama’s first two years almost
without hesitation, despite the historic pounding his party took in the
2010 midterm elections. Described in these thousands of wasted
pages is a death spiral, which Obama seems to believe there is no way
for America to escape. He even ignored the recommendations of his
own blue-ribbon deficit reduction panel, convened with much fanfare
last year as a sign of the President’s commitment to fiscal sanity.
This dead-on-arrival budget, in combination with the results of the
Obama spending binge to date, has but one use: it shows us what Big
Government can do.
Government, for example, is indispensable in the creation of high
unemployment. Left to their own devices, people will generally
find uses for each other’s talents. Every individual is both a
producer and consumer, employee and customer. The United States
is rich in knowledge and natural resources. Given stable
currency, reliable access to credit, and basic consumer protections,
business ventures will be created to fill the needs of any given
population. Large groups of people create opportunities merely by
existing.
The heavy hand of Big Government creates massive distortions in this
process. It increases the cost of labor, through regulations and
burdens like ObamaCare. By increasing the cost of labor, it
drives down demand. It destroys industries through moratoriums,
and chokes the life out of profitable ventures with heavy taxation and
regulatory oversight. Government can easily increase the cost of
pursuing an opportunity so much that smart businessmen will simply
ignore it.
Not even massive natural disasters can destroy jobs as efficiently as
government, because eventually even the worst earthquake or hurricane
ends. Government keeps unemployment high for years on end.
It even subsidizes joblessness, through lavish and prolonged
unemployment benefits.
Big Government is also vital in the creation of shortages. In a
free society, entrepreneurs respond to demand by increasing
supply. This is one of the reasons competition drives down
prices. If Company A is not generating enough supply to meet the
needs of consumers at reasonable prices, Company B will soon appear,
and find a way to increase supply so it can satisfy those needs.
Only the government can step in to shut down competition and deliver
shortages, artificially increased prices, or both. It blocks the
exploration and development of natural resources, keeping American
consumers at the mercy of foreign suppliers. It can block entry
to a market with taxes and licensing requirements. It creates
labor shortages by empowering labor unions, whose fabulously expensive
workers would otherwise be undercut by non-union shops on almost every
bid. There is almost no way to create a monopoly, or manipulate
supply to artificially drive up price in the long term, without the
assistance of government.
Government is the mother of entitlement. Only the State can make
unsustainable promises to favored constituents, and leave future
generations to cope with the crushing burden of fulfilling them.
A private entity which operated that way would go out of business, or
end up in jail, like Bernie Madoff.
A business entity that suckers people with ridiculous promises that can
never be kept will be sued for fraud. Government, on the other
hand, does this all the time, with complete impunity. Virtually
every action Big Government takes produces an obligation against future
generations. For example, Obama’s budget continues his weird
obsession with spending billions on “high-speed rail.” Whatever
other functions high-speed rail might serve, you must understand that
it is also an obligation. If we followed Obama’s plan of spending
$53 billion to develop a massive high-speed rail network, future
politicians would be obliged to keep spending on it forever, no matter
how much money it might lose. Abandoning it would be tantamount
to wasting that $53 billion investment, to say nothing of “destroying”
all the jobs connected with operating the trains, so the high-speed
rail system would be subsidized for eternity.
Only Big Government could produce the public-sector union benefits that
threaten to bankrupt several states. Private management generally
understands it has a vested interest in providing benefit packages that
won’t bankrupt the company in the future. Politicians, on the
other hand, love nothing better than to promise big pensions and
benefits to loyal union members, because it buys their support without
costing the present-day politician a dime. Only the government
can build billion-dollar levels of corporate entitlement through
massive bailouts.
And, of course, only government can produce crippling levels of
debt. A private corporation would see its credit rating ruined,
and probably face legal charges, long before it reached the absurd
situation Obama’s 2011 budget places us in. No company could sell
its stockholders on a business model where it spends 30% more than it
takes in, for years on end. No corporation can use force to
arbitrarily extract more income from its customers, as Obama plans to
do with the many tax increases built into his budget document. No
private concern can randomly charge one person for services rendered to
another. A private citizen will never awaken one morning to
discover he is $30,000 in debt to a company he would prefer not to do
business with.
An activist government produces unemployment, shortages, entitlement,
and debt by using power to reverse the normal operation of market
forces. That is the strategy laid out in Obama’s gigantic
budget. The bigger government gets, the more it will do these
terrible, but entirely predictable, things… and the more time it will
spend telling the private sector it is somehow responsible for problems
that simply could not exist unless the government created them.
Read it at Human Events
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