Sectors: Private & Public, comparison

What can the public sector do? Can extra gov spending help the economy?  Unemployment has been at almost 10% for a year, well over the worst 8% projected, without the Stimulus. There was suppose to be a lot of infrastructure projects, but those came to about 5% of the total. It actually seems that the Porkulus Package was engineered to NOT create value. Much was for political payback and generate ditch digging & filling jobs. How can $800 billion be spent (really about 75% of that, now) and NOT produce much? 

People forget that money for the public sector, is taken from the private sector. Gov spending displaces private spending–the part that creates growth & funds the government. Gov is about 44% of GDP. Just 3 years ago, it was 39%. About 9 years ago it was 33%. That has been continued growth in gov & its waste, producing less. Much was for political pandering, to gain votes; RINOs did it too. Bush increased size & regs, & was not conservative. Don’t forget, Dems had both Houses since 1/2007.

If gov was not taking that much of GDP, private production & spending would be larger, there would be less need for gov programs, and GDP would even be larger. Another way to look at it is to view “productivity” & “results”. Compare the output of the gov vs. private. Spending, by $ or %, of private, is 50% more than gov, but the private sector has many multiples (2-5? times) of higher value. That shows tremendous waste in gov.

Look at what the gov expenditures are on. Half is not in the Constitution. Another half is composed of items that people could work for, rather than being “transfer payment: from others’ work. A third half could better be provided by the private sector. When people talk about less gov, limited gov, such as the TEA (taxed-enough-already, albeit a backronym), the response is full of waste (crap), nonsense, filler, non-sequitors, binary choice of only anarchy as alternative, irrelevancies, etc., in trying to defend gov-waste. There has not been evidence or substance, showing the advantages of big-gov or redistribution & coercion. Even simple items, such as taxpayers being forced to provide for huge wasteful transit projects, have not shown big pluses or the cost-benefit analysis. Even though there are disagreements in econ, many principles cannot be avoided, in reality, such as in physics. Attributing cause to the outcomes of market processes is often wrong.

How can so much history be neglected. Look at the USSR, Cuba, North Korea & Vietnam, & how the way the EU is going. That big gov is producing less, with plenty of waste there. The reward mechanism of money is missing. Public sector employees do earn really good bucks, per worker, it’s about 60% more. For their actual results, it’s about double. In other words, to get the same “output” it the price is double on what the gov employees are paid. It’s even worse, their pay is not tied to performance. The unions can be blamed & their connection to the Dems.

Housing is a private good, and if government stayed out and didn’t restrict, would be less expensive, aand there clearly would not have any conditions set up that caused this recession.

The charts below show how gov has grown over the many years. but there is even less output form the gov, while it compose a larger portion of the GDP.


About Randall
A contrarian, not for conflict, but because many decisions are made, without considering the full impact & consequences.

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