Why Government Grows (otherwise titled The Tale Of Bill, Bob, and Government Gus)
One of the big, make that maybe the biggest, issues that Conservatives and small government types have to come to grips is why government automatically grows. Even government led by such conservative stalwarts as Ronald Reagan or Margret Thatcher are not immune to this. Looking back at their records it becomes painfully obvious that, at best, they only managed to slow the rate of growth. Why does his happen?
One of the biggest reasons is simply the dynamic of modern (meaning, post WW2) elections. If you want to get elected the easiest way to do so is to simply bribe people. When asked to choose between getting something for nothing as opposed to standing on principle most people tick the box for option A. It’s always easier for any politician of any stripe to talk about some new vote getting program or benefit as opposed to running on thrift. As Obama himself said a few days ago, he’d rather be talking about new programs than plans to cut any amount of spending.
The question becomes, how to change this tendency that is built into the system?
I think I have the answer.
You might think the solution is radical, but I think it makes sense.
The solution is to privatize money.
Try this thought experiment on for size.
Imagine a simple country made up of two hardworking people, Bill and Bob, as well as a third person we’ll call Government Gus. Both Bill and Bob have worked hard and have $10 each. Government Gus, who does no work that anyone will pay for, has not a dollar to his name. Still, Government Gus wants to win an election so he needs to buy both Bill and Bob’s vote. “What do you want?” coos Gus. “Ask me for anything, it won’t cost you a dime!” Bill thinks about it and says, “If you give me free health care, you’ve got my vote!”
“No problem”, says Gus. “What do you want, Bob?”
Thinking this sounds like a great deal, aBob says “I’d like free daycare!”
“Your wish is my command!” says Government Gus. “All you have to do is vote for me!”
Both Bill and Bob vote for Gus, and Gus is true to his word.
However, he does it in a way that Bill and Bob didn’t count on.
With one sly hand he takes $5 from Bill. He then hands $1 to Bob with a big smile on his face.
“Here’s your free daycare!”
“Thanks!” says Bob. “This is great!” Bob is so happy in fact that he doesn’t notice that Gus has just picked $5 from HIS pocket.
He then turns back to Bill, hands him $1, and says “Here’s your free health care!”
“Thanks, I guess”, says Bill.
After a goods nights sleep Bill and Bob think over what just hit them. Although Government Gus did what he said he’d do, they’re actually poorer for it. As things stand now Bill has $6 ($5 + $1 of heath care) and Bob has the same “($5 + $1 of day care).
Bill and Bob are pretty bright guys. It’s obvious that they were better off before accepting Government Gus’s “free” stuff. What’s more Government Gus now has $8, and god only knows what he’s doing with it. What do you think will happen the next time election year rolls around. Will Government Gus find it so easy to bribe Bill and Bob with their own money? Probably not.
They might even vote for Big Liberty Pete, and tell Gus to hit the road and get a real job himself.
But what happens if Government Gus DOES have a skill?
What if he’s, say, a world class counterfeiter?
Let’s rerun the above scenario with this new condition factored in.
Government makes the same promises, but this time he prints out some money when Bill and Bob aren’t looking.
Both Bill and Bob are thrilled. At first blush they both appear to be better off. They both still have their $10, plus a $1 worths of benefits they didn’t pay for. What more could you want? Bill and Bob aren’t quite sure where Gus got the $8 he now has, but hey, every body is richer now, at least in paper.
And of course, that’s the problem. Real wealth has nothing to do with numbers printed on pieces of paper. Money is merely a medium of exchange, nothing more. An unknown word starts to creep into Bill and Bob’s vocabulary. That word is inflation. The cost of everything is going up, to the point where they are just as poorly off as they are in the first scenario.
There is one crucial difference, though.
They are not able to make the connection between Government Gus’s sneaky counterfeiting, rising inflation and their now poorer states. The only thing they know is that things are getting more expensive and their lives are getting harder.
What happens when the next election rolls around? Do they vote for Gus, who is offering more programs to help, or Big Liberty Pete? I think you know the answer.
And there in a nutshell is the reason for the explosive growth of government the world over in the 20th century.
The fatal mistake is allowing Government Gus his own printing press.
As soon as you do the concept of “Of the people, by the people, and for the people” is turned on its head.
Without the ability to counterfeit Government Gus has to tax people honestly. This puts the people in the drivers seat. They earn the money and they have the power. The only way government can grow is if the people let them. Most people will see the benefit in being taxed a little for the few things that people can’t do themselves. These are things like national defense or a court system. Beyond that it is obvious that Gus can’t do much beyond his core competencies very well. Only when the productive Bill and Bob’s of the world give him the ability to counterfeit is Gus able to create the illusion that he can do more.
So, the question is, why transfer the power from the people to the government at all? It amounts to taxation without representation. Government Gus’s the world over have been able to take money from productive citizens and use it to buy power without the citizens knowledge or consent. If anything it’s WORSE than taxation without representation as most people are not even aware that they’re BEING taxed.
The answer, then, is obvious. It’s time to get rid of national currencies.
This is obviously an out there idea which I’ll have to expand on in a future post.
Tell me why I’m wrong though.
Told you it was radical. 
FIAT EMPIRE – A Great Documentary I found using Digg
Image via Wikipedia
Dec 5, 2006 This Award-winning documentary video, featuring presidential candidate RON PAUL, was inspired by the book, “The Creature From Jekyll Island” This explains it all in layman’s terms anyone can understand.
Using Digg, I was able to find this really well done documentary on the gold standard, sound money, and the dangers of our current paper (fiat) money system. Going through the comment section, I found several arguments against this video that I wanted to comment on here.
Lame. This is a very weak argument. All money and valuation is “smoke and mirrors” – gold doesn’t hold an actual value – just intrinsic in the eyes of the people. There is no difference between our fake valuation of gold & silver vs our valuation of dollar bills and soon our valuation of a single number that represents our wealth in a computer database somewhere …
There is some truth to what the person is saying above. No good or service has an objective value. Something acquires a subjective value when people want it, and are willing to trade real good and services for it. People desire paper currency because they believe they can exchange it for other goods and services. However, what they don’t understand is that paper is not stable, as the government is able to print as much of it as they want. As a crime, this is not different than what counterfeiters do. All governments of all stripes do this. The advantage of having your money backed by something real is that government can’t do this.
Dollars are backed by the same force that everything is backed by: supply and demand. Just how gold really shouldn’t be worth what it’s worth (it’s just a shiny metal a neat ability to avoid oxidation), dollars can be exchanged for goods and services even though you can’t go to a bank and ask for something physical. And as long as we all agree to use dollars instead of chickens or gold as an exchange, then the system works.
My point above kind of answers this as well. He makes an interesting point, however, probably without intending too. As long as we all agree to use dollars … That’s kind of the rub, isn’t it? As the government keeps printing more money, that paper is worth less and less (this is called inflation). When this happens, people stop using it, and the currency collapses. People see their life savings wiped out, their lives ruined. See what happened to Germany in the 1930’s, or to a lot of Latin American or African countries today. It is always a bad idea to let anyone (whether counterfeiters or the government) create money out of thin air. Personally, I’d take chickens over the US dollar at this point.
It amazes me how many people can talk on this subject without having a graduate level constitutional law class or even an college economics class….
I bet this person has a university level education. This is going to be a future post all by itself, as it nicely shows the problem with our entire education system. Stay tuned.
