"Resources get used to produce the goods and services for and/or in the government."
Tim, that is true of anything.
Other things don't have the dead weight loss that comes from taxation.
You consistently argue that money spent by the government represents zero economic activity.
Not only do I not consistently argue that, I haven't argued that once.
government spending is part of the free market
No it isn't. And its not just some technical semantic distinction. Government spending is determined by political forces not market forces. If government spending was 100% of all spending there would not be any free market.
The government isn't setting prices or restricting supplies.
Governments do both.
They are competing for goods and services with everyone else.
The services provided by government don't compete for customers, they tax the money away, and then provide the services for "free".
The government services are paid for by taxation. They have to take out what they put in. Because of the dead weight loss from taxation they have to take out more than they put in. Now that can be justified in many cases. Their are certain services which are vital and which can't readily be done by the private sector. There are other services that perhaps aren't quite vital, but are important, and again not provided by the private sector (even if government does not provide them), where the pay back is larger than the opportunity cost. If the government spend X dollars on the program, it cost the economy X+Y, the resources spent plus the dead weight loss, but for some programs, you might even argue many, the benefits are greater than X+Y, or more to the point even greater than what than X+Y+Z with Z being the return that private sector would get on X+Y. I'm not saying "cancel all government programs", I'm only saying that the program has to produce more benefit than X+Y+Z to justify itself, not just more than X. Meanwhile you seem to be ignoring even the X. ("where does the money go if not into the economy? Outer space? A black hole? Where?" - Message 24141796 ) |
