Is Government Spending the Same as Private Spending

Is Government taxing and spending the same thing as private earnings and spending ?

I think not ...  private spending comes from earnings of production which has an inherent feedback loop that destroys the unproductive  ... government spending comes from taxes which are not earnings of production and are not inherently sustainable, like a shark it must keep moving forward or die ...  there is no feedback loop ...

Think about it ...  our current individual (mostly) free market economy activity (I don't call it capitalism as that is a marxist construct used to re-label a free market economy and attack it) is not simply confined to money.  What we see in day to day economic  activity like price discovery and supply and demand also occurs in nearly every facet of our life.  Our freedoms and the choices we make are just other forms of feedback loops.  What to buy, what to do with our non working time, who to associate with, where to live, where to work, what to watch on tv, where to surf on the internet, how much exercise we get, what we eat, what we go to school for and who we try to sleep with, all of these activities involve complex feedback loops.  That is why the government uses the tax code to try and effect social behavior.  They understand the feedback loop and get involved in it.

But Government taxing and spending ?  Does it really have a robust feedback loop ?  Is government spending adjusted by its prior spending and prior results ?  I think not.

Yes, every 2 years we get to vote for the House of Representatives and some of our Senators but is that a real feedback loop ?  The government doesn't behave in a rational way because the people doing the spending are not in the actual feedback loop but we are, and as we have seen lately, even when we scream stop all we get is "talk to the hand".

In a real feedback loop the person expending the asset, be it time, money, affection or attention is the same person that receives the experience and lesson from that expenditure and adjusts future behavior accordingly.

So when private individuals expend their hard earned assets they pay attention because they are in a real feedback loop.  When the government taxes you they have certainly interfered in your feedback loop but unlike a private enterprise that sells you a product for your money and has its own feedback loop the Government has no feedback loop.  The Governments behavior is not adjusted by your behavior because you didn't have a choice in your interaction with it.

This is true of local Government but is even worse for the Feds.  On the "income" side of the ledger they can simply print money  to cover "excess" spending.

The point of this is that some forms of "spending" are different.  Money spent without consequence, i.e. Stimulus, will always fail to work on the feedback loops the private sector works with.