Why Government Spending Is Bad for the Economy

Though everyone would agree in principle that you can’t get something for nothing, it seems this truth gets completely forgotten the moment government spending comes up.

Source: Why Government Spending Is Bad for the Economy - Foundation for Economic Education

The fundamental problem with government spending is that it presumes that the government knows what is best to spend your money on. It doesn't. This article takes the real-world example of internet access (though it also provides a much simpler theoretical "pineapple" example). Biden proudly boasts that he is spending $42 billion to provide broadband access to the approximately 8.5 million people who do not yet have such access. This amounts to more than $4900 per family that would benefit. Incidentally, Starlink can do the same for $599.

Exorbitant prices aside, there is no way to know that the thing those people most need is broadband internet. If they are getting by fine with no access, dial-up, or whatever they are using, maybe they would instead benefit more from improved health care access for example? Among those 8.5 million people, I am sure there are a wide variety of needs that many of them would consider more important. I am also sure that among all of the people who do not have access to broadband internet, there will still be many who don't have access after this project.

Any government project ends up funneling a large portion of the money it extracts from its citizens to special interest groups. This case is no different. The government doesn't know what is best to spend taxpayer money on and even if it did, it is rarely motivated by doing what is best. Government spending is inherently inefficient and harmful to the economy as a whole. Harming the economy inevitably hurts the poor the most but is obviously harmful to everyone. The free market certainly isn't perfect but it works better than government.