Richest country in the world. And broke.

Van Jones, the 9-11 conspiracy theorist, one-time (possibly even present-time?) Marxist, and former Obama administration official said “We are not broke. We’re the richest country in the history of the world.”

He doesn’t understand the paradox of how you can be a rich country and broke at the same time.

Money isn’t available to pay for government services like road and bridge repair, national parks, law enforcement, environmental protection, and NASA. It’s a state level phenomenon, too. The richest state in the union (in terms of GDP), California, can’t even fund its state parks, forcing it to shut them down.

Normally it would be easy for a rich country like ours to fund such things. But we can’t, because all the tax money is committed to redistribution. Instead of spending the tax revenue on traditional government services, we’re transferring it from some people to other people, mainly through entitlement programs. Two-thirds of federal tax revenue is spent on redistribution. Lots of traditional government services already have been crowded out.

That’s what happens when you let the purpose of government change from being a provider of services to being a huge conduit for income redistribution.

 

 

 

 

 

California’s Vicious Circle Continues

California recently was ordered to free 55,000 prisoners because it can’t afford to hold them. It’s yet another manifestation of essential government services getting crowded out by wealth redistribution.

As pointed out below (under the Jan. 24, 2010 entry), in the past decade California state pension costs skyrocketed 2,000 percent. Many union workers can retire at age 50, with 90 percent of their pay, for life. 15,000 of them get more than $100,000 per year. That includes life guards.

In 2009, at least $3 billion was diverted from other government services to pension costs.

As Walter Russell Mead writes, “California’s public unions are sucking the state dry — like a parasite killing its host.” He quotes the “great Louisiana prophet of the blue social model Huey Long: ‘If you aren’t getting something for nothing, you’re not getting your fair share.'”

That so sums up what those on the left stand for these days. They’re always talking about getting their “fair share”. Most of the time, they mean getting it for nothing. (Typical is when some interest group gets free government benefits, and some other interest group screams that they should be getting the same or similar benefits in order to get their “fair share”.)

As explained here, California is caught in a vicious circle. “Constituencies sympathetic to businesses are leaving California in increasing numbers. Meanwhile the state’s generous social welfare programs pull in lower-income people – both from the within and outside the United States – who typically vote against the interests of businesses. With fewer pro-business and more anti-business voters (i.e. fewer Republicans and more Democrats), the result is even more regulations and higher taxes, driving even more businesses out, and so on.”

“Californians have slipped from having the 3rd highest per capita income in the country in 1959, to the 13th highest now. What’s their solution to reverse the trend? Measures to make the state business-friendly again? No. Most of the state’s elected representatives are trying to remedy the situation with more tax increases; part of the vicious circle.”

“So businesses will flee the state even faster. Fewer businesses will want to move there. Entrepreneurs won’t want to set up shop there.”

And its status as a failed state will be driven home even further.

Crowding Out Good Government

“The White House believe’s NASA’s current projects are too expensive…”, So the Obama administration “wants to kill” the traditional rocket and spacecraft program. (From front-page article in today’s WSJ).

Yep, it’s happening. The good things the government does are getting crowded out by wealth redistribution. They include space exploration, law enforcement, road and bridges, national parks, environmental protection, education, defense, and foreign affairs. A wealthy country like ours normally could easily afford all of those traditional government functions. But things are abnormal.

A whopping two-thirds our tax money is simply redistributed to other people, rather than spent on those government functions. With health care deform and the ever-expanding entitlement programs, probably three-quarters of our tax money will go toward redistribution within a decade or two, leaving even less for regular government functions.

While the White House believes the measly $20 billion or so a year that we spend on NASA is “too expensive”, it doesn’t believe that the two-trillion or so a year that we spend on Social Security, Medicare, Medicaid, soon-to-be Obamacare, and an assortment of other redistribution programs is too expensive. That’s because this president and his minions believe the main function of government should be to transfer wealth, rather than the normal functions (i.e. providing services that the private sector can’t provide).

For more on this topic, click here, here or here.