The Associated Press recently reported that half of all new college graduates are either unemployed or underemployed. The jobs connected to Alan Greenspan’s housing bubble are gone and will likely never return. Bernanke met the financial crisis with an unprecedented amount of monetary-base expansion, which has failed to significantly affect the unemployment rate. President Obama and his allies in Congress threw $800 billion at the economy to no avail and have been running federal deficits to the tune of over $1 trillion for three years now.
As Ludwig von Mises wrote in Economic Freedom and Interventionism,
Inequality of wealth and incomes is an essential feature of the market economy. It is the implement that makes the consumers supreme in giving them the power to force all those engaged in production to comply with their orders. It forces all those engaged in production to the utmost exertion in the service of the consumers. It makes competition work. He who best serves the consumers profits most and accumulates riches.
Today, no Western, industrialized country operates under genuine capitalism. In the context of mainstream political debate is actually a fascist-like partnership between big government and big business. The dynamic, cost-cutting competition that defines the uninhibited market has been stifled by Washington’s endless decrees of regulation.
Bloomberg News reported that Washington, DC, now tops Silicon Valley as the richest metropolitan area in the country. But few eased through the crash as lightly as D.C., much less prospered so widely on the rebound. The local unemployment rate, at 5.5%, stands well below the national figure of 8.2%. The region’s foreclosure rates have always been significantly lower than those elsewhere, and now housing prices in D.C. and across the river in the Virginia suburbs of Arlington and Alexandria are close to their precrash peaks.
Lobbying has thus become a lucrative profession for those savvy enough, and well financed enough, to pay for that subsidy or competitor-crushing regulation. What has changed is not the government payroll but the number of government contractors. It’s estimated that, thanks to massive outsourcing over the past 20 years by the Clinton and Bush administrations, there are two government contractors for every worker directly employed by the government. Federal contracting is the region’s great growth industry. A government contractor can even hire contractors for help in getting more government contracts. In order to project the image of a scant increase in the number of federal-government employees, a type of shadow economy of contractors has developed to deceive the public’s eye. These contractors are employees of the state whether on the official payroll or not.
The so-called private companies they work for do the bidding of the state at what is often an exorbitant price compared to what may prevail under free-market conditions. Government contractors are merely deceptive when describing themselves as private, for-profit companies. They are de facto agents of the state.
Social power is the power over nature, the living standards achieved by men in mutual exchange. State power, as we have seen, is the coercive and parasitic seizure of this production — a draining of the fruits of society for the benefit of nonproductive (actually antiproductive) rulers. While social power is over nature, State power is power over man.
The ruling class establishes the rules of conduct for millions despite being made up of just a very small portion of the population. Claiming a government employee pays taxes is the equivalent of claiming they pay their own salary.
Their goal is to keep the nation’s focus on the government’s operations. This guarantees more power, prestige, and authority for a city overrun by men and women who take pride in their lawful ability to wage war abroad and at home. The two most plausible deficit-reduction proposals — one by President Obama, the other by the Republican-controlled House Budget Committee — each calls for the government in 2021 to spend a trillion dollars more than it spends today.
Tom Woods writes in Rollback: Repealing Big Government Before the Coming Fiscal Collapse, it is estimated that the federal government’s unfunded liabilities comes in at around $111 trillion. According to Professor Laurence J. Kotlikoff, the unfunded liability gap actually exceeds $211 trillion. For a country that is forced into subsidizing the profligate living habits of the state and its partners in crime, the only justifiable outcome would be for the latter to suffer.
Source—mises daily—james miller