What Does Government Really Cost?

Most people, when asked this question, would likely give the figure that they pay in taxes.  But the true cost of government is much higher than the amount of taxes that it collects.  Government also creates all sorts of expensive monopolies, benefits some of its “privileged groups” over everyone else.  In effect government behaves much like the Mafia in that it favors some people over others, forces you to pay “protection”, is able to enslave you, force you into dangerous situations where there is a good possibility that you will die in one of its wars.  This is the reality of government.  It takes money from you, forces you to pay higher prices for goods and services produced by any of its own “favorites”.  Government is objectively “organized force”.  Organized force that only in “myth” is controlled by its own citizens.  It has its own armed forces, possesses weapons of mass destruction, and in most cases, does not allow its citizens to possess any means of being able to oppose it.  Over most of the world, governments strictly limit the private ownership of firearms.  Even here in the USA, the government imposes limitations upon the sort of firearms you are allowed to possess.  Or to carry for your own protection in many places.  In reality government views the people it rules as “subjects”, just as did kings and queens in past eras.  You may have the right to vote, but the choice is often limited to those who are seen as supporters of “government”.  Those who support the idea of more and more “government” controlling more and more of the lives of its “citizens”.  The term for this is “statism”. or the control by government of people’s lives.

Government varies considerably from country to country in its own makeup and its own policies.  The most common form of government in the developed world is the parliamentary form where legislature and executive are effectively “one”.  Under such a government there are two different ways of organizing things.  One is a coalition consisting of two or more political parties where each party’s power is based upon the percentage of the vote that it received.  The other way is a “winner take all design”, with the first type more common than the second type.  The less common design of government is the “divided” type of government where the executive is separate from the legislature.  In the case of the United States of America there is also a judicial branch which has the authority to overturn decisions made by the other two branches upon constitutional grounds.  However in all forms of “democratic” government there is a system of elected representatives who represent differing political parties and different philosophies of government.  We should note here that the term “democratic” covers a large number of different political viewpoints, but in general a democratic government is one where the citizens vote for representatives from one or more political parties. There is currently no “dimarchic” (selection of representatives by lottery) used anywhere on Earth (at the present time at least) although this is closer to what the Greeks of the Classical era considered as being truly “democratic”.  Most likely because politically powerful organized groups do not want a truly “democratic” government to start with!

It becomes rather obvious if you think about it that a “dimarchy” would not favor the sort of “privilege” that organized groups want.  The licensed professions and the licensed occupations want a government that favors them over everyone else.  That is pretty hard to get in a dimarchy as these groups are not numerous enough to obtain the number of representatives needed to obtain the government “favors” they can now obtain in our so-called “democratic” societies.  In a dimarchy they would never be able to obtain the favored legislation that they currently enjoy today.  Legislation that allows them to obtain much higher incomes than what they could earn without this legislation…  But to obtain these higher incomes, they must use the force of government to grant them the sort of monopoly necessary where the rest of us have no choice but to pay the higher price.  A much higher price of course than what we’d be paying without some groups being able to exploit the power of government to their own ends…

This is why I say that the “cost of government” is far higher than just the amount of taxes that you pay.  Government does a lot of things that benefit some people over others, and as a rule, when government does this, some people end up with the “short end of the stick”!  It isn’t just the income tax, the payroll tax, capital gains, but the added costs for the purchase of goods and services that you buy because government has provided its “favored people” with a legal monopoly where they can price their goods and services at a higher price than what would apply if these same people had to compete in a true free market.  Taken as a whole, the true cost of government is likely to be at least a couple trillion dollars “more” than the amount you have to pay in taxes.  In effect, we are paying (most of us) another two trillion dollars out because of government.  That is about $6,000 per capita.  Or say $24,000 a year for the average family of two adults and two children.  Thus in a libertarian dimarchy most people (95%) would be a lot better off than they are today.  The other 5% would be worse off since they would no longer be able to use the power of government for their own economic benefit at the cost of everyone else.  However, even this figure may not show the full effect.  Government engages in a lot of wasteful duplication of services.  For example, many federal agencies are duplicated on the state level.  So we’re paying for both a federal agency and a state agency to do the exact same thing.  There’s probably another half a trillion dollars being wasted right there.  ($1500 per capita)  Then in a libertarian society we wouldn’t have drug laws.  There’s about 150 billion being wasted there.  About $500 per capita.  As people in prison are an economic net loss, as is everything related to dealing with the issue, we can add this to the added cost of government.  So the family would be $29,000 better off under dimarchic libertarianism.  Let’s round that off to $30,000 per family as we won’t be the world’s bully any more either.  Libertarians are peace-loving people, not warriors.  Keeping our “nose” out of other people’s business solves a lot of problems we now have.




About muskegonlibertarian

77 year old retired owner of a security guard agency. Member of the Libertarian Party.
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One Response to What Does Government Really Cost?

  1. I enjoy your blog. Thanks!

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