Governments Are Becoming Too Powerful and Too Intrusive.

At one time, governments in Europe and North America held the belief that the wealth belonged to the people and their role was to provide an environment that allowed optimal development of that wealth at a reasonable price. In the United States particularly, the idea of liberty and small government was paramount until the early 20th century.

How times have changed

It is difficult to assess the day it changed. We do know that Theodore Roosevelt was an early promoter of the idea that governments hold a larger place in regulating business and promoting social welfare. The movement was well underway by the time Woodrow Wilson became president in 1913.

Today, the government of the United States and others in almost every other jurisdiction believes they have both the mandate from the people to regulate and promote social welfare. Given they think they have the mandate, they must also believe they have the skill to do so. Neither of those beliefs are obviously true,

Where it leads

The Biden administration is arguing for a vast and opaque spending bill of $3.9 trillion. Their argument is it cost free because the spending will be offset by higher taxes on the wealthy. Such an idea would have been impossible in 1890 because it assumes everything belongs to the government. Like some kings and pharaohs of old. Under those rules, redistribution of wealth is indeed cost free.

However, under the ideas that built the American system, redistribution is not cost free. It necessarily involves the “taking” of wealth from one person or group to the advantage of another person or group. No one has enunciated the cost of so doing and I doubt the government knows or wants to know what those costs may be.

It is further unclear that they know or can describe, with evidence, the benefits of their largesse. Thomas Sowell, among others has addressed the question of benefit and found they have been less than zero, when compared to the rate of change of social advancement prior to their introduction. In particular, the “Great Society” initiative has added nothing of value.

You could discover some of its effects 50 years later if you look.

  • Poverty rate as a percentage of the population – almost unchanged.
  • Two parent family units – Dramatically lower
  • Youth crime rate – higher
  • Youth unemployment – higher
  • ¬†Expectation of an education suitable to the times – near zero in many jurisdictions.

The money invested in this generally failed system is in the trillions of dollars. The costs are spread over dozens of departments and programs and would be difficult to quantify. You may want to notice that each of those departments and programs have governmental overhead. The dollar in the hand of those the government purports to be helping is at the cost of at least $1.50 to the producers and quite likely far more in some cases.

Is there an honest cost/benefit study kicking around somewhere? You better believe there is not. The “Great Society” is a complex example of the effects of secondary and tertiary effects, not considered in the initial assessment. Those in charge are not even slightly interested in knowing its failure.

They care it empowers the government to act in support of the people. Even if it doesn’t.

Old Wisdom

In the mid 1960s, a wise man told me the government was able to do just two things well – wage war and inflate the currency. Given their performance in withdrawing from Afghanistan it appears they may no longer be competent to wage war.

I will be surprised if they ever lose their ability to inflate the currency.

Things to notice

The government, rather than providing a well-designed playing field, reasonable rules, and objective referees, has become our enemy. The rules change or are interpreted as they wish. The playing field has become inaccessible to many as the result of their failures in other areas. The education system has destroyed many young people.

I would like to dismiss that assessment as hyperbolic. Consider this recent story from Baltimore.

City student passes 3 classes in four years, ranks near top half of class with 0.13 GPA

You need a GPA of at least 3.5 to get into the University of Maryland. A GPA of 2.3 to 2.5 will allow you to attend community college with a fair expectation of succeeding there. Where can you go with a GPA of 0.13? Other than jail or the welfare office?

What if the story is hyperbolic and their GPA was 10x better? 1.3 is pretty much useless too. Is there anything to do but rework the way the education system fis with their constituents? It is impossible for me to believe the students are exclusively at fault. They have been taught futility and behave accordingly. I suspect, without evidence, that teachers care more than this shows but have largely given up. Finishing the day unharmed is likely their highest priority.

Does the government care? I doubt it, otherwise they would make an effort to improve.

It has taken 50 years to fail. If it is even possible, it will take a long time to fix.

The Takeaway

Governments everywhere believe the wealth of the country is theirs to use and the people are like pieces on the playing field.

Governments have moved from the power of persuasion to the persuasion of power.

People, especially young people cannot see how they fit into any probable future they can access.

Everyone is insecure. They cannot predict the rules.

Rome wasn’t built in a day, and it did not disappear in a day either.

Become ruthlessly objective about society and the ideas promoted by the people seeking power.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

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