Why do people think that government spending is more wasteful than private spending?

Question

Does the government blow huge chunks of its income on drugs, gambling and prostitution, like a lot of people do? Does the government spend $100,000 on a monument to its dead dog, like I heard of a guy doing? Does the government buy fancy cars, jewelry and mansions like people do when they start making a lot of money? Does the government give its chief executive hundreds of millions of dollars in stock options?

Here is what I still don't get: Why is it wasteful if the government spends millions on a bridge that only serves a few people, but it is not wasteful if a private individual decides to spend money on a bridge that only serves a few people. It seems to me both are wasteful, and it also seems to me that private individuals do more of this kind of thing than the government does.

Answer 1

In regards to the additional question.

Under the assumption of rationality, private spending guarantees that the people who need bridges will have them built AND pay for them. The concept of wasteful you use is not the same as is used in econ. economic wastefulness results in inefficiency. private bridge building is not wasteful because the individuals who wanted/needed the bridge paid what they thought it was worth to construct it. No wast there. your definition of wastefulness is your own thoughts on if the bridge is wasteful. irrelevant to the world of economics. all the "wasteful spending" you talk about that is done privately is not economically wastefule since those people value those goods. But, gov't spending takes a share of EVERYONE's money to pay for things. So, those who don't need some sort of public good end up having to pay for it. Or in some cases, a public good isn't made because only a small few want it made.

Answer 2

Simple, because it is NOT wasteful when people freely choose to spend their own money on things that they value, such as mansions or expensive cars, or dog tombstones. Those things create enormous wealth for people all up and down the supply chain. They make us all richer and they enable the creation of more resources to satisfy peoples' human needs and desires -- whether someone's selfish desire for a new toy or some "good cause", like feeding starving kids or whatever.

As long as people are free to spend money on things that they truly value, the economy is productive and is an engine of wealth creation. Your own opinion about what other people value means absolutely nothing, because you are much, much, much too stupid to be making decisions for 300 million other people. A shame you don't recognize that.

Government spending is NOT an example of free people spending money on things that the individually value. The government takes money from people through the threat of violent force; and then the government makes decisions about spending the money based on murky political special interests and bribery. The result is often something ludicrously wasteful and unproductive -- such as the Ted Stevens Bridge to Nowhere, in which hundreds of millions of dollars would be spent on a bridge that would only serve 50 people who chose to live in an isolated area by saving them a short boat trip.

That is not a productive or value-creating way to spend money. No private individuals would EVER freely choose to make that investment. It is hugely wasteful and wealth-destroying. The government does a lot of this kind of stuff, and there is a tangible price to pay -- that wealth-destroying behavior substantially reduces the amount of resources available to satisfy peoples' REAL needs.

Answer 3

Government is not accountable for their spending that's why it wasteful.
A gvt will lease buildings as opposed to buying them (the one in power doesn't want to appear to be spending $10M on a building and when finally paid for doesn't want the other re-elected party's expenses look better because they have no rent to pay)

Coming from leasing, we get 5x the rent when it's a gvt office because 1) they don't question the price and 2) they can afford it.

How many executives have round the clock bodyguards even after they are no longer executives?

How many executives get a pension for life after working only 8 years?

Read the internal audit committee report on gvt spending (about 500 pages) of overspending. When's the last time you visited a private company where they spend $25,000 for each toilet?

The overspend PERIOD. The execs that get paid the stock options are the result of them making money for the company not a result of sayiing Gee we have a deficit or lost money let's increase taxes. Think about all the TAXES you pay. Not just income tax, but the hidden tax on cigarettes or on gas or property tax or sales tax. trust me we are all probably paying close to 76% of our income in tax.

Make $100 and give the government $0.76??? once you look at everything we pay in tax

Answer 4

Our problem with it lies in the fact that we, who pay taxes, are funding the government. So really they are wasteful with OUR money. We feel compelled to complain since we contributed to the amount of $ the government has and think they should ASK us before spending. IF I ran my household like the governemnt runs its finances I would of been dead years ago.

If someone blows their OWE money, thats their choice.

: ) Hows that ?!

Answer 5

The government has much more money to spend than we do. And it's obvious since the Federal Budget is currently over its limit, they have a problem.

Answer 6

The government blows billions trying to save people from transfats and foie gras. Also, it subsidizes things like ethanol that don't make economic sense...