Wasteful spending will sink our country

Republicans hold majorities in both the house and the senate so there is no excuse for policies that will sink our country. Here is Raymond L. Richman:

With a budget deficit in 2017 of $666 billion, adding to the $21 trillion of debt already outstanding, $15 trillion of it owned to foreigners, time is long overdue to reduce federal government expenditures. Congress has been unwilling to eliminate any wasteful program if a significant group of voters supports it. And overspending on ongoing programs is the rule because of Congress’s failure to exercise the required oversight.

Two important economic laws, the Law of Diminishing Returns and the Law of Increasing Cost, apply to government spending. According to the former, increasing expenditures in a government program will result in smaller and smaller increases in benefit per dollar expended. Overspending on existing programs is probably the rule rather than the exception. According to the latter law, increasing expenditures for government programs will increase the costs of producing goods and services in the private sector. The reasons we don’t see these effects is that the economy is complex and dynamic. Over time, the private sector will invent new products, improve management techniques and methods of production, and experience other changes. Increasing government expenditures diverts funds from the private sector to the public sector, forcing the private sector to consume less or save and invest less.

When government spends more money on projects to reduce global warming, for example, it is at the expense of increased costs of other goods people buy. No one claims that it would prevent global warming because climate is determined by natural forces, and man-made global warming is only part of it. Moreover, since electricity produced by wind and solar power is more costly than electricity produced from fossil fuels, businesses and consumers have to pay the higher utility costs, and consumers will have to pay higher prices for domestically produced goods.

Failure to pay attention to these economic laws means that government expenditures on many if not most programs exceed the amount that cost-benefit analysis would justify. Government would get increasing returns by reducing expenditures, and the private sector would enjoy increasing returns and reduced costs as government expenditures are reduced.

Read more: American Thinker

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