Government Programs and the Economic Scoreboard

"We're draggin' baby."
--Swamp Thing (Con Air)

Many proponents of Big Government tend to ignore the economic ramifications of their policies. It is for the common good, they say. The cost doesn't matter.

If only the world conformed to such a fairy tale. The reality is that resources are scarce, and scarcity can only be alleviated via efficient production of goods that consumers want. Policies that discourage production, or that encourage production of goods that consumers do not want, or that encourage production in manners that consume more resources than they produce, are all bound to lower general standard of living over time.

Take, for instance, welfare programs. Proponents argue that welfare programs help people when they are down and encourage them to get back on their feet and become productive. If this were true, then welfare programs should produce positive economic returns over time. Productivity should go up, and welfare programs would essentially fund themselves over time.

But they don't. Welfare programs consume more resources than they produce. Resources must be taken from producers in order to fund these programs. And they must be taken in ever greater quantities. The quantities that must be taken have become so large that we must borrow from the future to pay for them.

Government is a consumer, not a producer, of resources. All government programs carry an economic cost, some higher than others. The idea that they are an 'investment' is ludicrous, as the economic scoreboard clearly indicates that these programs generate negative returns.

They serve as a drag on progress.