Mommy/Daddy, Where Does Wealth Come From?

The number of workers employed by the government went up 324,000 between July and August while the number of workers in the private sector declined 278,000, according to the Bureau of Labor Statistics (BLS).

Isn’t this a problem? Why aren’t more people concerned?

All economic growth takes place in the private sector. Even if you believe in massive government programs, those programs cannot be funded without wealth generated by the private sector.

The BLS shows there were 20,041,000 government workers in July 2013. In August, that number had climbed to 20,365,000 — an increase of 324,000 people on the government payroll.

That’s government employment level, seasonally adjusted, for male and female workers ages 16 and over.

At the same time, July to August 2013, the workforce in the private sector fell from 113,164,000 to 112,886,000 — a decline of 278,000.

Add to this growing numbers of people giving up on the work force, and choosing instead to live off of savings, family, or government welfare.

Add to this the growing numbers of people having their hours cut, so that employers can reduce the burdens of the forthcoming Obamacare mandate/fines on companies who hire full-time employees.

I recall a time—as recently as a decade ago—when the majority of Americans held the government responsible for the well-being of the economy. Ronald Reagan soared to victory primarily because of the economy, and Bill Clinton rode to the White House on his famous slogan, ‘It’s the economy, stupid.’

This attitude was partly a fallacy, because the government does not, in fact, create economic growth. However, the more government takes steps to reduce burdens on the private economy—lowering taxes, lowering regulations—the better the private economy will do.

That no longer seems to be the case. Politicians, starting most notably with the President, are rewarded (and reelected) the degree to which they grow the government. Politicians no longer talk—even insincerely—about cutting taxes or reducing regulations. The game seems to be: Grow the government.

Instead of looking to themselves, or to productive businesses in the private sector, for economic growth, a majority of Americans now appear to look to the government. ‘What do you have for me today, government?’ That’s why there’s no negative reaction to these kinds of numbers, about government jobs increasing and private sector jobs diminishing.

As long as the government seems strong, then most Americans are happy. Or at least content. It’s the new normal.

But these naïve and foolhardy Americans fail to ask what should be an obvious question: Where does the government get its money? From the private sector, obviously. There’s no other possible answer. One-hundred percent of the government comes from taxes on wealth-producing people in the private sector. (Even government employees, who pay taxes, get their income ultimately from the private sector, which finances their jobs and salaries.)

American culture has reached a point where the majority don’t even really grasp that wealth, to be consumed, must first be created. Americans are well aware that this country is a land of plenty compared to the rest of the world. Why is that? Most assume it’s a combination of racism and good luck. That’s why they feel guilty, and allow our President to apologize for American success and propose a war that will do more to help our enemies than protect American security.

We cannot go on like this. America, even with recessions and one Great Depression, has generally grown throughout its history. The only way it can keep growing is for the government to cut its programs, cut taxes, cut regulations and generally get the hell out of the way of the private economy.

The private economy has no defenders, not in either party. Nobody seems aware of this fact, nor does anyone seem to care.

It’s a very dangerous trend.


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