I think one of the easiest mistakes most people make when looking at government is the misinterpretation of government actions involving the distribution of money.  All too often it gets labeled "spending" but in an economic sense its no more spending than if you took $20 out of your wallet and handed it to your 6 year old child.

This is a dangerous problem because it allows the government and those that support having an oversized government to continue to act recklessly in regards to obtaining and distributing the income of hard working citizens.  Government does not have a requirement to produce concrete results, nor to insure that any outlays of cash reach their desired destinations, and the current culture in most national capitals reflects that lack.

But to look at this question, we need to examine what government really is and why they exist.  If we look at what historical records we have there definitely was a time where people didn't have or need large governments watching over how well labeled their food was, and if their health care was provided for them through a system of government transfers.  We can surmise that early man mostly lived and worked within family or clan bonds and other than having a patriarch or matriarch to bring disputes to for settlement, there was little central control.  Of course once you start to settle and farm fertile valleys, those same tribes often found that other tribes wanted the same valley, so military leaders appear and the family had to develop a system of military service.  Also since the family wasn't moving as much, there would have developed a need for a more structured dispute resolution process.  If you can remember anything about the "Code of Hammurabi", one of the first written examples of law ever found, you get an idea that this system tended to be brutal, and simple, but was also an attempt ton bring order to communities.

But that was your first "government".  It wasn't a huge system like we see today.  Instead it was a simple structure, built from a need to provide defense from outside enemies and to bring order to the community.

Health care?  not as a government program
Retirement?  who retired back then.
Government funding of the "arts"?  no, there wasn't a surplus to provide for that

What money the government did spend was usually for something tangible.  It paid the military.  It paid for the judges and police.  It built the roads and markets.   And unfortunately, corruption paid for palaces for the rulers.  But everything was tangible.  The money the government "spent" produced goods and services for the citizens.

but now a lot of government spending, is not spending.  Social Security isn't a spending program.  The money is taxed from currently working citizens, but it is then blindly given to other citizens with no requirements or stipulations.  The recepient can spend, save, throw away, hide, or even give away that money without any concern of what the government is going to do.  But, that means that the money "spent" isn't producing anything at the time the government writes the check, expect perhaps a dependency on those government checks.  This kind of spending does not create growth in the economy.  Growth relies on profit and investment, and neither is a product of government transfers.

"pork" spending is another area where this problem manifests.  We see government outlays going to research projects, grants, or to extremely specialized buildings which otherwise would not receive investments.  The business world avoided these projects because they view the risk as excessive and the reward as inadequate, but since the government does not have to produce results, money is throw out like candy to undeserving projects in an endless quest to purchase votes.  Sadly, once again economic illiteracy means that few voters understand the damage done by this process.

Government is necessary.  There are things which an individual cannot be expected to provide, but which become possible if the community all works together to provide the necessary will and funds.  But governments are power, and all to often they become corrupted by their ability to tax and distribute the earnings of hard working citizens.  Today we have a government which finds "spending" far too easy, and in the end it will be up to us, the community that backs the government, to make the changes necessary to reverse the process.

Trackposted to Mark My Words, The World According to Carl, DragonLady's World, Pirate's Cove, The Pink Flamingo. The Bullwinkle Blog. Leaning Straight Up. High Desert Wanderer. Pursuing Holiness, and The Yankee Sailor, thanks to ,Linkfest Haven Deluxe,