Government Money

23% of the people think that the government has their own money. What have these people missed? There is no such thing as the government’s money. There is only the people’s money.

Governments spend your money after they have taken it from you. You do not pay taxes, they take taxes from you. There is a difference.

Why must they take the money? Because you would not voluntarily spend your own money on the things the government spends it on. You would try to achieve the results you do value in more efficient ways. While they claim to be, most government departments are not very interested in solving the problems they have been given. See this earlier post. Survival

I think most people know that government costs something. Police, the courts, good roads, airports, hospitals, schools, and the fire department are all valuable and we would pay to have them if they did not exist. It is the extras that we would not choose to buy that cause the problems. An interesting game is to decide what government departments would survive if they had to charge for their services and use that money to pay their own way. Weights and Measures, food safety, drug safety, CBC, licensing, the zoo, the water service, CRTC, ………

To be a successful citizen you need to know:

  • On what the government spends the money,
  • Would you spend it differently? Better?
  • What happens when the government spends money they don’t have?
  • What happens when the government prints money?
  • What happens if the government can’t meet its obligations?

You cannot manage your affairs well without knowing the government’s impact upon them. Consider government debt. Notice that governments are in debt and by big amounts. Do you know what that means?

It means you are in debt. There is no such thing as government money and there is no such thing as government debt. They spent more of your money than they have taken so far. On things you might not value. A government deficit and the debt that results are just taxes that they haven’t taken from you yet. You owe the money. You will pay.

The only way the government can balance their budget is to unbalance yours.

Notice that interest rates are very low just now. People who owe a lot of money benefit when rates are low. What happens when they inevitably go back up? Nothing good for the government and thus nothing good for us because the people are the money tree.

If you would like to have a different result, encourage your politicians to spend less and help them to do so. Every time you hear, “The government should do something about that,” decide if you would pay directly to have it done. If the answer is no then don’t encourage them to do it.

It’s all your money. Try to influence how it is spent.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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