Most Government Services Are Disservices

On page one of the Telegraph is another headline, which is almost sure to be correct.

"Your country needs YOU to work five years longer." And accept big cuts in health and education spending. And pay more taxes.

There is no mystery to this news item. You don't have to be a clairvoyant like Ben Bernanke to see that 1) living standards are certain to go down in England and America...and 2) governments will have to raise taxes and/or cut 'services.'

We have put the word 'services' in quotes because we don't you to get the wrong idea. Most government services are not services at all...but disservices.

Each year since the war, government budgets have gone up. Now, there are more people getting money from the government than there are taxpayers. And what do the taxpayers get for their money? Is the country really a better place than it was in the Eisenhower era? Are we better governed? Are we safer?

We are certainly better off in many ways...but all the ways we are better off are the result of technology and private innovation, usually in spite of government. A couple of inventions have made life much more agreeable. Air conditioning is a major boon to gracious living in the southern states. And the Internet - with free telephone service, via Skype - is another major boon.

And while we're on the topic of technological innovations, we'd like to alert our dear readers that the DR has entered the social media realm, by way of Twitter. Historians, economists, and contrarian investors alike use Twitter to communicate current information throughout the day that you may not find in our daily columns.

Of course, there are many innovations that are probably net negative too. Television, for example. It's brought entertainment and companionship to millions over the years. But it's also expanded popular, brain dead culture and disseminated propaganda. People seem stupider today than they did when we were young...TV is probably largely to blame.

But returning to the feds...

This year, the U.S. stopped being the United States of America. Yesterday, it was reported that the states now get most of their money from the feds.

"He who pays the piper calls the tune," is the old expression. The feds are paying the piper; the states have to dance to whatever tune they propose.

That's the end of the federal system...the end of the system announced in the U.S. Constitution...which was a union of sovereign states. Now, it's a fully centralized system...a popular democracy of the worse sort...in which celebrity hacks are elected and rule without any real shame or limit. Even Louis 14th, France's Sun King...an absolute monarch...knew he was subject as well as monarch. He was God's man on the throne of France. Now, America's leaders answer to no one...except the mob of TV-addled voters.

The song the feds are singing is a song of higher taxes...more regulation...bigger government budgets...and huge new deficits. The War on Capitalism will cost trillions. The direct costs - and the indirect cost of a battered, shackled, tortured market system - will have to be paid somehow. The good news is that citizens will get fewer services from their government. The bad news is that governments will reduce services in the worst possible way - firing teachers, rather than educational bureaucrats...filling holes in bank balance sheets, but failing to fill the potholes in the roads...and so forth.

And more bad news is that they will raise taxes...

Bill Bonner
for The Daily Reckoning Australia

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