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Basically, I know the government is not really a traditional business. Obviously, the government is there to govern. The reason I call it a business is mainly due to the huge size and cost of the government. If the government really was a business, it would be required to be accountable for what it does...of which it really is not. After all, no business can continue hiring during a recession, continue giving raises during hard times, and expand continuously without selling a product. My main concern is that the govenment continues to expand at an alarming rate, and the problem is that the government does not fund itself. This idea is key.....the government can never fund itself...it is funded by the private sector. I wouldn't even have a problem with government growth if the private sector grew at the same rate. This picture needs to be looked at in the sense of the government growth as a percentage of the whole.
I'll give an example of what I mean. Take a large corporation that employs 100,000 people that make shirts. The corporation is running very efficiently with about 90% of its workforce laboring out 9000 shirts a year with 10% of the workforce managing the grunts. Each year, a few of the grunts get promoted to management...but the number of employees stays the same and nobody retires. After about 5 years, the management makes up about 15% of the workforce...and of course, production will slow a bit with only 85% of the people actually making product. That is not so bad, especially when only a few workers are promoted each year. Ten years later, management is becoming overwhelming. So many people have been promoted that now there are only about 60,000 workers and 40,000 managers. This is now a major problem....the company must pay all of the managers, of which there is 2 managers for each 1 worker, while production is down to 6000 shirts per year. Accounting is now using all profits from sales to pay the managers, the managers have had to cut the pay of the workers and borrow money from other business to meet budgeting demands. Does this sound like a well run shirt factory? Well of course it doesn't....but the point is clear. Management in this example obviously represents the government, the workers represent the private sector, and the shirt sales represent the private sectors ability to create funds. Of course, our government is doing the exact same thing, and we are very much past the point where the private sector can flat out support the government WITHOUT borrowing huge amounts of money in order to stay viable.
Many people disagree with me that the government growth is a problem at all. But think logically with me....how many shirt makers does it take to run a shirt business? We can't have a company full of managers sitting around hoping for business if there is nobody to make the shirts can we? In my current profession, I make predictions...I am paid to forecast what will happen in the future based on past and current trends and trends are much easier to see in graph form. As you can see from this graph, government growth is reaching a point in which it will not be able to support itself in a growing economy. I am of the opinion that the more government grows, the more we will see recession and eventually a permanent depression in the US economy.
The reason I say this goes back to the shirt company example...the more we shrink the number of workers, the less we will be able to make in end product. This will lead to a smaller private sector, and a much smaller ability to grow economically after paying in what needs to be paid to fund the ever growing and expanding government. One of the MAJOR flaws in our system of government that has allowed this government growth to get out of hand, and the resolution to the problem is not in sight and that flaw is the idea that money obtained via loans is a product that should be measured positively in our calculations of economic growth. Our entire US economy really believed that in the late 1980's and all of the 90's that our economy was growing....the stock market was "booming" and everything was great. But take a look at this:
 How can we possibly rationalize that the economic boom of the 90's was anything other than a borrowed dream? Let's say that the shirt company, with only 40% of the workers making shirts, decides that they want to produce not only the original 9000 shirts a year that they orginally made, but rather double...or triple that amount. How is that possible? Well easy...the company borrows the money and buys shirts from another company and resells them. The company LOOKS to be booming with sales at 300% higher each year....but what happens when the loans come due? How will the company possibly pay the loans, AND continue to stay in business with a diminished work force, AND continue to shrink the workforce to grow the management? Well, our government and economy are in the exact same situation right now. Folks wonder why we have been in continuous recession for several years now...but they do not understand why we are in thes recession. What do we hear daily from our government? Go out and spend money!! Buy that house, buy that car! I.E., take on many more loans...this will inflate our gross domestic product numbers to LOOK like the economy is rolling great! The larger our economy LOOKS (whether realistic or not), the more our government can quietly become larger and more powerful without even a question being raised. There is another problem with the diminishing size of the private sector and it's inability to pay for the governments' growth....and that is an inability to even support itself...as can be seen by increasing welfare and almost 50% of wage earners with little or no ability or even demand from the government to pay taxes. These people cannot earn enough money if the private sector is putting most of its total output back into the government rather than in businesses...the source of the earnings in the first place. But the businesses have the money right? Not if they are taxed out of busines, but of course, the company will have to lay off most workers before it closes the doors. One should easily be able to make the connection between high taxes on businesses and rising unemployment numbers, but that is another essay entirely.
Many people have no problem at all with the government becoming larger and larger....I've even heard such arguments that tax cuts are bad and "how can the government afford to survive with tax cuts?" Well as you can see from the graphs, the government can easily survive and continue to grow, simply by borrowing more money, which it does already. Besides, I havn't seen one person that says "tax cuts are a bad thing" freely give money to the government if they aren't forced to give it. Anyway, the size of the government is a major problem and will become more so in the coming years if the growth continues. Even if the growth stops, realistically, the government must operate on half the budget that it runs on now in order to possibly remain viable. After all....consumer debt has created such a powerful illusion that we have the money to afford this system of rule. I just wonder...does society as a whole just want to turn a blind eye until it is too late? Or will we just wait until the government is so large that the sole purpose of the private sector is just to be laborors for our managers? I don't know about you, but I'd rather just have uncle Sam...not comrade big brother.
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