One of my Marines works in Supply, and he orders literally millions of dollars of stuff daily from vendors. Government vendors? No! Private vendors. Civilians. Civilians who are so damn glad to be getting these orders they could just shit.
This is how they feed their families, and are able to hire people so they can feed theirs own families. The vendors go out and buy things from other vendors so they can make the stuff for the Marines, and the circle of life continues. That money Uncle Sam ‘stole’, is pumped back into every community in this country in one way or another. Stop that flow for one week, and try to imagine the state this country would be in…..
Money, sent to the central fountain of Washington DC, and then sprayed up in the air to come back down and water the whole country. We are a Super Power for several reasons, and I am beginning to believe that this system is one of them. And it supports at least two of the other Reasons: Our Military, and our highway and transportation infrastructure.
Wanna see a town die? Pull all of the government contracts and funding and subsidies from it and let it try to fend for itself. Some make it. Most won’t.
Frederic Bastiat demolished this fallacy back in 1850. It goes thusly:
Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.
But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen.”
It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
Bane also neglects to consider that the government not only imposes these hidden opportunity costs by redirecting income that would have been spent in other ways, but that a good portion of the money it is spending is borrowed. The federal debt, as of August 19, is $7,926,125,407,102.74. At 4.239 percent on the 10-year bond, that’s 335,988,456,007.09 in annual interest payments or $2,799.90 for every worker in the country. Since the average worker makes $29,280.68 and the current savings rate is zero, those interest payments rob the economy of almost 10 percent of consumer spending.
As for the highway system’s role in making America a superpower, the country had already won two world wars before the Federal Aid Highway Act of 1956 was enacted. It is the combination of America’s size, wealth and technological advancement that makes the USA a superpower; any reduction of one of those three elements will reduce America’s preeminent status in the world.