Not being a #libertarian doesn't mean loving the state; it means accepting complexity. The real world is a monstrously complicated place; there's not just one thing wrong with it, nor just one thing that can be changed to fix it.
Things like prosperity and freedom don't have one cause; they're a balancing act.
Here's an alternative theory for you: original sin. People will mess things up, whether by stupidity or by active malice.
There is no magical class of people (e.g. "government") who can be removed to produce utopia. Any institution is liable to failure, or active criminality. Put anyone in power-- whether it's communists or engineers or businessmen-- and they will abuse it.
Does this mean things are hopeless? Of course not; it just means that we have to let all institutions balance each other. Government, opposition parties, business, the media, unions, churches, universities, non-government organizations, all watch over each other.
Power is distributed as widely as possible to prevent any one institution from monopolizing and abusing it. It's not always a pretty solution, and it can be frustratingly slow and inefficient, but it works better than any alternative we know of. zompist.com/libertos.html
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• Federal government's spending is not constrained in the way households or businesses are. When the government wants to spend more, it simply creates more dollars by crediting bank accounts. There is no need to raise taxes or issue bonds first.
• While the federal government creates dollars out of thin air, it needs real resources and labor hours in order to spend those dollars on actual goods and services. If spending is too high, it can cause demand to outstrip supply, resulting in inflation.
• Maintaining price stability and full employment are the main constraints on government spending. To prevent overheating the economy, the Fed can raise interest rates and the government can increase taxes. But these actions are after the fact, not requirements for spending.
Q: What is the most significant of all of economic forces?
A: Cost.
Q: What has the most influence on economic performance?
A: Cost.
Q: What is the limiting factor in every transaction?
A: Cost.
Q: What gives importance to the factors of production?
A: Cost.
The economy is composed entirely of transactions. In every transaction, cost is a consideration; often it is the most important consideration. This is the reason that factor costs are important. And that is why the factors of production are important.
Because the economy consists of transactions, because transactions always occur at the intersection of cost and price, and because cost is always the limiting factor—
The taxpayer money myth is a dangerous and outdated belief that must be challenged and dispelled. It wrongly assumes that federal taxes fund government spending, and its persistence undermines the possibility of progressive policies. (1/4)
This myth is dangerous because it reinforces the false notion that welfare recipients are taking advantage of taxpayers. Furthermore, it implies that taxpayers are a privileged group, thereby legitimizing the idea of cutting welfare programs.(2/4)
If taxpayers fund the federal government, then it follows that they should decide what the government does — after all, it’s “their” money. This is why the taxpayer money myth is so dangerous.
(3/4)
Here is a thread about understanding GDP, Federal Spending, purpose of Federal taxes, Influence of Rich and wealthy on public policies, and Ignorance of the voters.
1/15: GDP measures the economy and spending; it's not rocket science, but politicians, media, and economists often pretend not to understand it to avoid government spending growth.
2/15: Federal Spending is necessary for economic growth; when it doesn't grow, recessions and depressions occur, even if non-federal spending grows. The economy needs government spending to grow.
The U.S. government, which is the issuer of our money, works differently:
Congress votes to spend “new money” on something, then the Treasury and the Federal Reserve credit the relevant bank accounts, &...that’s it -new dollars are created
The government has spent new money into existence. Later, Congress may tax “old money” back out of existence, but it isn’t collecting money in order to spend it. It’s “offsetting” earlier spending.
It may also offset spending by bumping student loan rates, policing for profit, or increasing our FICA(Social Security & Medicare) contributions, or various other taxes and fees.