For centuries it was an obvious truism that government personnel and programs were the least efficient, and least effective, allocators of capital and spending. The $400 hammer, $2,000 toilet seat, and the infinite loop your phone call goes into when attempting to contact the IRS all taught us this economic truism. Yet today the calculated slide toward believing we need the government involved in every facet of our personal and business lives is gaining momentum every month. This shift around the world, not only in the U.S., is crushing global gross domestic product (GDP), and subsequently innovation, for so many previously strong economies.
According to the U.S. Bureau of Economic Analysis, government spending in the United States 37% of GDP in 2022. It rose as high as 47% during COVID. One reminder – the government has no money! Every year they have to take it from you and allocate where they want to spend it. So, government employees and politicians, who typically are not the top academic achievers in school, are the ones to whom we blindly give control of 30-40% of our future? Do top Harvard Law graduates become federal prosecutor employees? Do top MIT graduates go to work for the EPA?
Why do we choose to elect people, and follow entrenched government agencies, who take 20-50% of our earnings by force and then pick winners and losers in our economy because they are the biggest spender. We have to follow the boss’s orders at work because he controls our paycheck, but why do we sleepwalk through life and not demand to spend our money where we will get a 10x better return?
In the 1960’s, 1970’s, and 1980’s the United States experienced a great number of years of 4% GDP growth and even 5% and more. Now, we have all been convinced by the government that 2% is acceptable. Wake up from this sleep!
Nathan Lewis, a contributor to Forbes, calculated that if GDP was just 1%-per-year higher for ten years that would mean an additional $495 billion in tax revenue in the 10th year alone. U.S. citizens are brainwashed that higher tax rates create more tax revenue when, in reality, they crush the end result. Keeping money in the hands of citizens and companies, who allocate capital more correctly, creates a 10x return for not only the citizens, but the government also! Why do we believe the lies? Why do otherwise well-educated people follow like sheep?
Stop blindly letting the government allocate your hard-earned capital. It only hurts you, as well as them. Let’s all stop operating against our own self-interests and even against the best interests of our country.
Revive Adam Smith and The Wealth of Nations – “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” This is how everyone wins.
More importantly, revive Ayn Rand – “Government help to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off.”
Have a great week! Keep the Faith and Finish the Race! Keep Speaking Victory!