L.A. Liberty

A Libertarian in Leftywood

Happy Cost of Government Day, California! →

My fellow Californians will be happy to know that they are now finally working for themselves this year, and not the government. According to a new report from Americans for Tax Reform, California’s “Cost of Government Day,” the day the average worker has earned enough to pay off the spending and regulatory burden of government at the federal, state, and local levels, fell on August 18.

That’s 230 days Californians had to work this year just to pay the cost of government. Moreover, state taxpayers had to endure cumulative tax increases of about $34.4 billion over the last ten years, or $924 for every man, woman, and child in the state. This accounting of both spending and regulatory burdens gives an even more complete picture of the true cost of government than the Tax Foundation’s Tax Freedom Day report, which is also excellent but focuses solely on governmental tax burdens. (See my previous post  on California’s Tax Freedom Day—April 16 this year—here.)

California’s Cost of Government Day falls six days later than the national average (August 12), making it the 43rd-worst of the 50 states and the District of Columbia. Nationally, the average American worker had to work 103 days to pay for federal government spending, accounting for 28.2% of net national product, 50 days to pay for federal regulations (13.6% of net national product), 44 days to pay for state and local spending (12.1% of net national product), and 27 days to pay for state and local regulations (7.6% of net national product).

The combined regulatory burden has increased nearly one-third (31.6%) in just the last decade. Government regulation is strangling economic activity, which is always a bad thing, but especially so during a time of economic recession or stagnation. As the ATR report noted, an April 2011 Phoenix Center study estimated that shrinking regulatory agency budgets by 5% would increase GDP by $376 billion and increase employment by 6.2 million over a five-year period. That study also concluded,

On average, eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually. Conversely, each million dollar increase in the regulatory budget costs the economy 420 private sector jobs.

But why stop at a measly 5%? Why not throw off the shackles of regulation in a real significant way—say, a cut of 40% or 50% (or 100%—I can dream, can’t I?)—and really allow the engine of free-market capitalism to start humming once again?

On his fantastic TV show "Freedom Watch" on the Fox Business channel, Judge Andrew Napolitano is fond of posing the rhetorical question, “Does the government work for us, or do we work for the government?” As the ATR report demonstrates, the sad truth is that we work for the government—to the tune of more than 60% of our labor and productivity. Thus we are more slaves to our government than free from it. No wonder our economic and fiscal/debt situations are so dire. It will only be when we take an axe to the size and scope of government and regain control of our private and commercial freedoms that we will be able to blaze a trail to a more stable and prosperous future.



1. Don’t think Krugman or Keynesian economists support war for the sake of benefitting the economy. This misconception stems from the analysis that WWII, a time of total war and production for war, this led to high levels of employment and helped bring an end to the depression. 

I guess I should say thanks for giving me the opportunity to back these up? Cheers. Most of the sources here directly link to ones that contain the requested material. Two birds with one stone. Enjoy.

Keynesian economists and Krugman actually do support the broken window fallacy.

  • Krugman’s war fantasies by William Anderson
  • Does Capitalism Require War? by D.W. MacKenzie (commentary on Krugman throughout)
  • Posted by Lew Rockwellon June 5, 2011

    Writes Andrew Penn Fitzgerald:

    Actual quote from Krugman on ‘This Week’ this morning: “If we had the threat of war, had a military buildup, you’d be amazed at how fast this economy would recover.”

    And here I thought that we were currently waging offensive war in at least four countries with troops in more than 150 foreign countries and currently spend more on our military than every other country in the world combined. Clearly we just need to do more in the militarist direction (similar to Krugman’s other advice that we throw more money down the bailout hole to make it work).”

  • A compulsory draft is AMAZING at reducing “unemployment”, you know - forcing people to join the army and get shipped off to die in war does wonders for reducing the % of employable people.
  • Check out Robert Higgs lectures; totally demolishes the myth that the war ended the depression.
  • Disastrous Economic Fallacies - Terror as Stimulus? [2min video] *Another Krugman quote.

2. Even if you pay people for seemingly menial or unimportant tasks, the people working these jobs generally will either have been unemployed or have a low enough income that they spend what they make, thus one accomplishes both putting people back to work and increasing personal consumption/spending levels.

3. Find me an article where Krugman supports a housing bubble, or any bubble for that matter.

It’d be my absolute pleasure.

Last Monday evening, Lew Rockwell, from a tip by someone named “Travis,” posted this damning quote of Paul Krugman’s from a 2002 New York Times editorial:

To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Krugman. 2002. Calling for a housing bubble.

4. “Debt” isn’t killing the economy. And “debt” isn’t the only problem. More like, “Unemployment stagnating economic growth? Spending will fix that”.

  • The annual government deficit, plus the annual interest payment that keeps rising as the total debt accumulates, increasingly channels scarce and precious private savings into wasteful government boondoggles, which “crowd out” productive investments. Establishment economists, including Reaganomists, cleverly fudge the issue by arbitrarily labeling virtually all government spending as “investments,” making it sound as if everything is fine and dandy because savings are being productively “invested.” In reality, however, government spending only qualifies as “investment” in an Orwellian sense; government actually spends on behalf of the “consumer goods” and desires of bureaucrats, politicians, and their dependent client groups. Government spending, therefore, rather than being “investment,” is consumer spending of a peculiarly wasteful and unproductive sort, since it is indulged not by producers but by a parasitic class that is living off, and increasingly weakening, the productive private sector. ~ Repudiating the National Debt, Murray N. Rothbard

5. Again, I’d ask when Krugman ever advocated that, and would also say there are times when either inflation or deflation are ways to correct economic fluctuations.

  • Krugman Strikes Again by Peter Schiff

    In today’s column, Krugman analyzes the Greek debt crisis, arguing that the best solution for Athens would be to simply inflate away its debt burden with printing-press money. Krugman laments that this sensible option is being foreclosed by the monetary priggishness of the German heavyweights in the European Union, who are “foolishly” seeking to prevent inflation and impose fiscal discipline.” ~ April 12, 2010.
  • Inflation and Deflation, Human Action by Ludwig von Mises

6. This one doesn’t really make an argument, but rather seems to assert that your own belief is we are spending too much.

More a fact that I accept, as opposed to a ‘belief’ which requires faith.

7. This actually would be more beneficial to the economy, as anyone who has taken even one economics course knows that consumer spending is an essential part of any economy and yet human behavior is irrational in that when the economy slows instead of spending and pumping money to help get businesses moving and people hired, the savings rate increases thus further exacerbating the problem in the first place. Those with more disposable income ought to spend it. Just saying.

Hate to burst your bubble [pun intended ;D], but that ‘economics’ course you took - whilst being an appeal to authority fallacy - was also a waste of time & money. Don’t worry, I was also forced to sit through them aswell.

  • Consumers Don’t Cause Depression by Robert P. Murphy

    “There’s one saving grace about Paul Krugman’s column at the New York Times: when an Austrian economist wants to explain how mainstream economics leads to ruin, he can always trust Krugman to set up the target in a clear, concise manner. This saves us a lot of work, because we don’t have to first build up the position before knocking it down.”

Long story short, I get this is supposed to be a joke, or “meme” but with little backing and sense to these particular ones I don’t think this is anything more than partisan mockery of legitimate challenges to your own economic viewpoints. 

A long story short… “It’s funny because it’s true.”

MySpace Tracker