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From: gjk@talcott.UUCP (Greg J Kuperberg)
Newsgroups: net.politics
Subject: Re: Re: The WSJ on Reaganomics
Message-ID: <123@talcott.UUCP>
Date: Sun, 25-Nov-84 19:14:22 EST
Article-I.D.: talcott.123
Posted: Sun Nov 25 19:14:22 1984
Date-Received: Wed, 28-Nov-84 04:22:06 EST
References: <652@loral.UUCP> <1208@dciem.UUCP>
Organization: Harvard
Lines: 27

> ================
> ... Back to 
> basic economic truth: the cost to the citizenry of government is the
> total it SPENDS (plus some), not what it taxes or borrows.
> ...
> ================
> No it isn't.  When the Government spends money, it transfers money from
> one group of people to another.  There is no NET cost to society, since
> ...
> There will indeed be a cost to US
> society, and perhaps a greater cost to the rest of the world, but it
> isn't due simply to how much the Government SPENDS.
> -- 
> 
> Martin Taylor
> {allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt
> {uw-beaver,qucis,watmath}!utcsrgv!dciem!mmt

The cost of government spending is two-fold:

1)  Income tax is a tax on labor.  It is in fact an exhorbitant tax on
labor.  This is one reason that labor is so expensive in the U.S.  Such a
huge tax on labor is very bad for business.  Ask an auto company.

2)  Most government money is given to government employees.  Thus the U.S.
government is a very competetive employer, diverting much labor away from
the economy, and making the remaining labor yet more expensive.