Inflationomics

Inflationomics - DOGE

Department of Government Efficiency (DOGE)

Efficiency generally means that something works with minimal or no waste. In the world of business, an organization is considered to be efficient if/when it earns a profit…the greater the profit, the greater the efficiency.

Governments were never built to be efficient. Governments pass laws and “enforce” them with the use of force; i.e., the end of a gun barrel. You either do what the government tells you to do or it arrests you and locks you up. In time, if enough laws are passed, resentment and foot-dragging rule the day. In short, governments are the least efficient method for getting things done. People are constantly looking for ways around laws…that’s what lawyers do. That’s why lawyers are so attracted to governments.

Governments obtain their funds by seizing productive peoples’ earnings or wealth. They were never intended to earn a profit. They use budgets to fund projects. If the budgeted funds are not all spent, they are lost. This encourages wasteful spending. Furthermore, because government officials are voted into office, government handouts and favoritism can be used to buy votes. In short, by their nature, governments are inefficient. Bottom line, you cannot make governments efficient. You can only eliminate the parts you don’t like…and hope those parts don’t come back with the next wasteful administration.

By the way, setting up a new government department only gives the government an additional way in which to waste money. Do you think it will terminate itself when it has achieved its goal, or will it never obtain its goal? Why do you need a department to tell you how wasteful governments are? Everyone already knows this!

Governments are not efficient, and cannot be made to be efficient, for the following reasons:

  1. They are not for-profit entities. They use budgets to fund projects. If the budgeted funds are not all spent, they are “lost.” So the bureaucrats find wasteful ways to spend all budgeted funds, and ask for more the next budget cycle.
  2. Because government officials are voted into office, government handouts and favoritism can be used to buy votes and fund boondoggles.
  3. If a government spends more than it receives in taxes, it doesn’t go bankrupt…it raises the taxes.
  4. If a government can’t politically raise more in taxes, it can borrow against its ability to receive/raise taxes in the future.
  5. If the government has control over a printing press and it can’t borrow more money because:
    1. this reduces the funds available to private entities, or
    2. its interest rate is too high, it can simply print more money, thus reducing the value of each currency unit in the future. This is what governments do! They have been doing this for hundreds of years and eventually, they destroy the value of their currencies and have to start over with a new currency.

The founding fathers of the United States knew this. That is why they tried to limit the size of government with checks and balances and a constitution that would reserve certain rights to the states and individuals. Of course, this barrier was removed with the civil war (war between the states), and the federal government has been growing ever since.

Fortunately, with the advent of the “world wide web,” the free market has come up with a private alternative to the fiat currencies that the governments of the world are printing. It’s called Bitcoin. It is a supra national currency with a limited supply and a cost associated with its use. In time, as its use spreads, it will replace the fiat currencies of the world, and perhaps even gold, as a store of value. This will allow the people of the world to conduct business without the use of the ever-devaluing fiat currencies

In the long run, when the fiat currencies printed by inefficient governments of the world become worthless, people will have a way to survive and start over. Perhaps next time around, they will realize that governments are not efficient and cannot be made to be efficient. The only answer is to strictly limit their size and restrict their ability to expand their power through votes and money manipulation.

Robert F. Sennholz

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