Thursday, May 11, 2006

Costs of Big Government

Now, let's analyze those costs.  The government has been largely successful at a lot of things it does, so lets see if those successes are worth it.

The Federal Reserve's choice to print money has helped us avoid recessions.  The result, however, has been that the value of each dollar has significantly decreased.  This is why you can no longer go buy a turkey for 30 cents for thanksgiving, but now you pay upwards of $15.  Inflation is a very real issue in America today.

The US government's decision to support Israel has been successful.  One thing I didn't mention was that the US government also CREATED Israel.  Essentially, we chopped up the surrounding countries and stuck it in the middle.  It is located in the middle east, surrounded by middle eastern countries.  Strangely, now, those countries support the terrorists who attacked us on 9/11.  The cost of life has been largely ignored by the US government who continues to support Israel today.  Also, this is not the only cost.  Moreover, these major oil-producing countries formed an alliance (OPEC) that has drastically raised the cost of oil, and therefore gas, to what it is today.

Now, what about the government's alternative fuel.  With oil running over $70 per barrel today, surely this alternative fuel from coal will be useful.  This is, sadly, not the case.  The liquified coal, when it was originally created, ran $8000 per barrel to produce.  It is still a long way from being worth the money to produce and distribute.

Finally, let us analyze sin taxes and subsidies (taxpayer dollars to support  struggling businesses).  These two are best when combined because we don't have to get too confusing and detailed.

Primarily, subsidies have protected farmers (primarily family farms) from dying out when their product is less wanted, and sin taxes have discouraged the use of tobacco and alcohol.  Now, there are other unwanted effects, but lets examine this on these sole, successful grounds.

The unfortunate result has been that the government's excess taxes on cigarettes and alcohol, force tobacco and hops farmers near bankruptcy, so it takes our tax dollars and uses them to bail the farmers out.  So, you and I end up paying for them to produce a product that isn't selling.  I hope that's enough prove that politicians seem to miss the cost every time.

This ignorance of "unforseen" costs is ignored by politicians who still support these programs today.  The government has chosen to ignore the solution and recreate one through its own beaurocracy which results in further unforseen, unwanted, costs.  Essentially, the government does more than it should.  How much should it do?  We'll get to that soon.

If this isn't enough, and you want more on unforseen costs (or anything you don't understand) just drop a comment or email and I will do my best.

Sincerely,
Ted

As you increase the cost of the license to practice medicine, you
increase the price at which the medical service must be sold and you
correspondingly decrease the number of people who can afford to buy the
service. – William Pusey, then president of the American Medical Association

When more of the people's sustenance is exacted through the form of
taxation than is necessary to meet the just obligations of government
and expenses of its economical administration, such exaction becomes
ruthless extortion and a violation of the fundamental principles of a
free government. – President Grover Cleveland

2 comments:

Amanda said...

It's been awhile since I've commented on your site! I actually couldn't remember my user name and password for a while! Fifth time's the charm! ;) Right, down to business...What's wrong with our government? I'm glad I've got you to explain all this political stuff! I'd be lost without you! Well, I'm sure I could live without this information, but now my life seems more fulfilled:) You did a nice job with this piece, very easily understandable, and only one punctuation error that I noticed! But, I probably made 5X more in this comment than you did in your piece, so don't feel bad!

James said...

A couple of things.
Britain created Israel not us though we certainly endorsed and bankrolled it. Its also no coincidence that they are still our close ally in the Middle East and Israels. This also makes anger in the Arab world a no brainer but many dont get it. It doesnt justify the Arab response but it helps to explain it.

Secondly I just ran across an article today about a possible breakthrough in oil production that would make Colorado the owner of the largest fuel deposit in the world. Check it out! http://www.killerisme.com/index.php/2006/05/30/oil-worries/

Third farmers are just as likely to be paid not to grow a crop by the Feds. Crazy as it sounds.

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