How is the government able to shift resources from the private sector to the public sector?

Answer 1

In our economy, the government has the ability to shift resources from the private sector to the public sector by changing focus and government spending. Since the government has a nearly unlimited supply of money (from borrowing abroad, borrowing from US citizens, and tax revenues) it can encourage industries to produce goods and service that the government will buy by enticing them with large sums of money. In this way, privately owned resources will go to the "highest bidder". If the government can create more profits for private industry than private consumption, they will shift resources to the public sector - the government.

Answer 2

Taxes drain money and resources from the productive private sector to the non productive public sector where the resources are squandered foolishly.