Spending other peoples money on other people. That's government.
image credit: Roger Maynard, cartoonist

Milton Friedman said the following:

There are four ways in which you can spend money.


You can spend your own money on yourself.  When you do that, you really watch out what you’re doing, and you try to get the most for your money.


Then you can spend your own money on somebody else.  For example, I buy a birthday present for someone.  Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.


Then, I can spend somebody else’s money on myself.  And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!


Finally, I can spend somebody else’s money on somebody else.  And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get.  And that’s government.  

~ Milton Friedman, 2004, in a FOX News interview

I have often thought of this. Government spends other peoples money on other people (or things). How ‘gravy’ is that?

Plus, government is not in the business of having to make a profit. It’s other peoples money. So there’s little or no motivation for efficiency, spending wisely, a good product or service, and all the associated financial issues that you and I must be concerned about in our lives, jobs, or businesses.

Government, by threat of force, forfeiture, or imprisonment, demands your taxes. They can (and do) raise your taxes to feed their insatiable non-profit appetite.

Government also ‘borrows’ money from the Federal Reserve (you and your children and grandchildren’s future) to make up the difference between your taxes and their deficit spending.

It’s so ridiculously easy for them. Seemingly no limit or repercussions.

Spending Other Peoples Money On Other People

Seriously, think about this. Pretend your job is to spend money that is not generated from your own employers success. It’s simply a pallet full of money that appears at the loading dock every single week. Your job is to spend it on a external project having nothing to do with you or your company.

  • You’re not going to get in trouble if you spend too much because the pallets keep showing up.
  • You won’t be in hot water if you do it wrong, make costly errors, and waste money as a result.
  • You don’t have to worry about streamlining the project or having any hard deadlines.
  • There’s no problem if you bloat the whole ongoing project with expense or inferior product or service because there’s no one really enforcing that kind of thing.

It sure is fun when you get to spend other peoples money on yourself. At least you can splurge, right? And it’s for YOU, sot that’s pretty neat…

But what about when you have to spend other peoples money on other people? It’s not for you. So you really don’t care too much, right? It’s not your money, and you can’t spend it on yourself. How boring! Now you just ‘gotta spend it’ before the next pallet of money shows up… sounds like work.

Nice system, huh?

I think about this when I hear politicians talking about taking over the healthcare system in the United States. Do you really think they can do as good or better a job than private industry? And can you even imagine the cost of the net result?

It’s true in many aspects of government involvement or meddling (or takeover) of private industry. It’s going to cost more, it’s going to produce less, and it’s going to be inferior. It will be destined to fail without more and more of other peoples money.

Friedman said it best: “If I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. ” “And that’s government”.

Pro Tip: When required to turn a profit (else go out of business), products or services must be produced that are in demand and of a sufficient quality and price-point to sell into that demand. Duh.

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