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Government Overhead and What Is Unseen

Submitted by TX Politico on Wed, 02/11/2009 - 09:50
in

Borrowing from Bastiat and "That Which is Seen and That Which is Unseen" . . . we know that every dollar the government spends is balanced by the dollar it takes from the public and thus is not spent by the public.

...the State gives poor excuse when it says, "With these hundred sous, we shall employ workmen."

The taxpayer can truthfully reply, "With the hundred sous, I would employ them myself." 

The claimed encouragement of labor is a delusion.

My question is: does anyone know the average cost of government overhead?  For every dollar it takes in, how much is spent on overhead that is not spent on the final deliverable?

If they spend $1T they take from the public, how much do they actually have to take to get that $1T?

If they have an overhead of just 10% (a ridiculously low estimate, I would guess), wouldn't they actually have to take $1.1T from our pockets to spend that Trillion?

Or should we figure it the other way: they take $1T from us but really only $0.9T is spent on "stimulus" spending and the other 10% is taken up by overhead?

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Comments

And for every dollar the government...

Submitted by davidfarrar on Wed, 02/11/2009 - 11:10.

...doesn't take out of the pockets' of the consumers, five dollars will be gained in the GDP in five years at no overhead expense!

The American people are doing the right thing when they believe they and their government have borrowed too much; they have cut back their spending and started to save. The government is now telling us,"Okay, if you won't spend until you drop, the government will do it for you."

Our economy is based on borrowing. It is a giant ponzi economy. It cannot last. The future of this country depends on changing this paradigm. The sooner we change it the better we will be. The very last thing we should be doing now is prolonging the inevitable. It will only make the change that much more costly when it comes -- and it will come.

ex animo

davidfarrar

Great "How Money Works" Education

Submitted by TX Politico on Wed, 02/11/2009 - 12:00.

Check out this series of videos about "How Money Works".  A real eye-opener. . . .

Where Does Money come From? (Money As Debt), Parts 1-5

Lets look at the Bush tax

Submitted by In between on Wed, 02/11/2009 - 10:48.

Lets look at the Bush tax cuts. Which I think add up to 800 billion dollars to date. The end result is that was borrowed money from other countries, in effect a country that ran on borrowed money for tax cuts, we are back into a recession, our money is going to Iraq (another 800 billion dollars to date), and our middle class jobs are going overseas, and the stores are full of Chinese goods. Add to that a banking/housing crisis and bailouts. And we are years behind in investing in our infrastructure and we have not invested in the future as third world countries are. And add the fact we are borrowing more and printing more money.

So what will it take to put Humpty Dumpty together again?

A recession

Submitted by davidfarrar on Wed, 02/11/2009 - 11:08.

What many of our Republican senators fail to understand if that this economic "contraction" is necessary and is good for the economy. All Obama's porcus maximus stimulus plan will do is artificially inflate the market for a brief period of time until the money runs out and the necessary economic contraction is completed. In fact, it is already happening and is almost  completed. It is unfortunate the Obama's porcus maximus stimulus plan will only prolong the completion of the contraction.

 

ex animo

davidfarrar

alt-a's aren't even close to defaulting yet

Submitted by RisingTide on Wed, 02/11/2009 - 12:47.

let alone CRE.

FIRE IN THE HOLE!

and, sir, the financial system of our country is bankrupt. this is NOT 'necessary economic contraction almost completed'

never will be

Alt A's and Default Rates

Submitted by TX Politico on Wed, 02/11/2009 - 13:15.

040408 - Default rates for "alt-A" loans increasing

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier.

052908 The Later The Subprime And Alt-A Loan, The Greater The Default Rate

If you are looking for an indicator on who is defaulting on subprime and Alt-A loans, just see when they were written. A 2007 subprime loan has 26 percent chance of being in default.

121408 A Second Mortgage Disaster On The Horizon?

Asked how many of these option ARMs he imagines are going to fail, Tilson says, "Well north of 50 percent. My gut would be 70 percent of these option ARMs will default."