What if one day $10,000,000.00 fell from the sky and appeared on Main Street between the Court House and Government Building? Immediately the police are called in, surrounding the large bundle of cash,... waiting for the County Commissioners and City Council to decide how best to utilize this gift from heaven for the local community.
One choice would be to allocate the money to City and County Government. Some of the money could go towards budget-starved agencies to help with any revenue shortfalls. Some of the money could be used for economic development (promoting tourism, attracting businesses to move to the area) and community efforts such as better parks, better streets, a few more police officers and emergency personnel. Also the money could be used to solarize certain government buildings, helping our city and county move towards a sustainable green zone.
The other choice would be to divide the money up among the citizens of Klamath County and let them determine how best it should be used.
Which way is best? Which way would help us grow our local economic pie? Which way would be better for economic growth and stability of our community? Which way will deliver money in the most efficient manner to the goods and services that the citizens of Klamath County value most?
In this scenario the fundamental question is which group knows best how to invest and grow wealth: the government sector or the private sector? If you are a socialist the answer is easy, government. The socialist believes central planning and elite government thinking always know what is best for the “people they serve.” However, contrary to this university theory, reality has shown us that time and time again it is the private sector which grows wealth. Matter of fact, the government sector can not grow wealth (or does it very poorly/inefficiently). Instead government’s nature is to consume wealth not grow it. That is why government continues to return to its citizens asking for more of its money. If government knew how to grow wealth on its own, it would have no need to ever bother its citizens for more money. But we all know, from personal experience, that certainly is not the case.
While some in the private sector might foolishly spend all of their new money in quick order, many would not. Those who were wise would invest it in their business, some other business, the stock market, gold, etc. Some would save while others would pay down debt. There are millions of ways the money would be used by the private sector that an elite group of government officials could never imagine or execute. Through these millions of ways, the private sector will grow the economy. The pie will get bigger. Why? Because the private sector is far more careful with its own money, than the government sector is with our money. The private sector is also far, far, far more efficient in how, when and where it invests and spends its limited resources, than government who expects to get more and more each year.
In government if a department head does not spend their entire budget each year, are they rewarded for being efficient and saving the tax-payers money? Absolutely not. Instead the department budget is cut the following year because, in government thinking, the department was given too much money and that is why there is some left over at the end of the year. This government-think promotes waste and inefficient spending, not efficiency or wealth creation. Even so, we do not want a government that has extra left over in order to invest, because more often than not government officials rise to their positions not based on merit but based on seniority. Their skills in investment are never as good as those in the private sector. And in the investment game, when you remove the ability to fail (meaning you will be fired if your investment plan does not return the yield promised), then rarely are wise decisions made with that investment.
So back to the question: Which way is best? Which way is the best way to take a gift of $10,000,000.00 and make sure the needs of the community are best met and that the economic pie can grow? Answer: give it all to the private sector.
While this illustration may have seemed silly, the bottom line is if we desire a better Klamath County — a better economy, a better way of life, a better community — then giving government any more of our tax dollars is clearly the wrong way to achieve such goals. In other words, government has enough.