The Fallacy of Government Spending and Why It’s Bad

‘Governments often hurt the very communities they try to improve’

It has become too frequent in this country that governments, whether federal, state, or local, feel the need to spend taxpayer dollars on improving their communities rather than protecting the citizens they represent. Whether it’s the Hoover Dam being built during the Great Depression or a city’s park being renovated every few years, governments have been known to spend every dime of taxpayer money on wants rather than needs. A city needs its government to provide police and fire departments rather than new parks and public projects. Roads are important to a city; city-sponsored homeless shelters are not. In fact, items such as these will only work against the city they are designed to help. Homeless shelters will only incentivize being homeless; regular park renovations and city projects rather than police protection will incentivize carelessness with taxpayer dollars as well as crime. Not only that, but spending money that is not yours is never a good idea, especially if you waste it on things you don’t need.

Some people like government spending, saying that they enjoy how their communities have improved. Some would even say that the increased government spending has increased commerce and consumer spending in the city or town they reside in. After all, they say, GDP increases with government spending, meaning a higher quality of life for those living under said government. Furthermore, city goods are non-exclusionary; everyone gets to enjoy them, regardless of if they helped pay for them or not. Basically, they say, a community is better off if a government spends more money than if it spends less.

This ideology extends out to the federal government. If the federal government spends more and more money, life will get better and better. Communities will thrive, the country will prosper, and the people will be happy with how their money is being spent. Government programs like welfare, Social Security, unemployment benefits, and others will be seen as outreach programs that help the downtrodden and encourage them to get back on their feet. This will all be possible, they say, because government is inherently good, and will help those it governs.

These are the people who refuse to look at the other side of the equation. In order for a government to bring in money for various projects, it must tax its citizens, sometimes at high rates. This is exactly the case with property tax in communities with very little property ownership and a liberal government. With a very small portion of the population paying property tax, we can assume that their rates will go up substantially rather than minimally. Therefore, in order to avoid financial downturn, landlords will increase their rent prices to soften the blow of the increased property tax. It’s only a softened blow because they cannot increase it so much as to lose their renters, meaning they will eventually take a hit on the increased property tax. Both the landlord and the renter are worse off because of the increased tax, and quality of life is therefore decreased. It does not matter what the government can produce, because at the end of the day, all they are doing is taking your resources from you and using them to produce something that will most likely provide no utility to you.

Governments claim to know what is best for you, and will continue to feed its constituents this lie over and over again. Government will claim that the free market cannot produce the goods that it produces because capitalism is built for the greedy, but government was built for the needy. If a community “needs” a park, the government will give them a park; if a city needs a library, the government will give it a library. According to government officials, these are things that capitalism can simply never provide.

But that is an incorrect statement on capitalism, and an inherently careless way to spend taxpayer dollars. First of all, the beauty of the free market is that if a community really does need a commodity, such as a park or a library, it will provide that product because it will have become profitable to do so. This can be seen with products such as private and charter schools, which were conceived as an alternative to the state-run public-school program, which was seen by many as a sub-par education system. Another example is the formation of accounting and tax firms. These were created because people were often too busy to do their own taxes or companies needed help keeping up with their daily transactions. The private market saw an opportunity to provide value – value that others would pay for – and thus a new industry was born. If it isn’t valuable to society, it will cease to exist in a free-market economy. If it is valuable to society, the free-market will step in to provide the commodity in question.

Government spending today has a lot of flaws, and shows almost no resemblance to the government that our founders envisioned; on that solely protected life, liberty, and property. Taxpayer dollars are precious, and should be used accordingly. Government-sponsored healthcare, libraries, homeless shelters, welfare programs, etc. cost the taxpayer a lot of their hard-earned money, and often work against the very communities the programs are designed to help. However, unless told differently, governments will use your money carelessly; they don’t care that it goes to waste. At the end of the day, it’s not the government’s money; its yours. If it was their money, they wouldn’t spend so much of it. Government is but a necessary evil chained by the Constitution, and you should remember that the next time you pay your taxes.

Author: Matthew White

Founder and editor-in-chief of The Everyday Republic.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: