Government Spending is Spending -- Not Investment

Politicians, Democrats and Republicans alike, love to justify their profligate spending binges, with money which does not belong to them, as “investments,” as if the money will not only be repaid in full, but with dividends and interest to boot.

But if that were so, this nation wouldn’t be close to default on more than $14 trillion in debt with virtually nothing of value to show for it. If government spending were actually investments, this country would be awash in surpluses and the common people would be enjoying prosperity beyond their wildest dreams.

That's because the result of investment is creation of value, while the result of spending is consumption of value. So when politicians talk about spending as “investments,” they mean precisely the opposite of what they are saying.

Last March, for example, the United States quietly deployed a special radar-equipped warship to the Mediterranean Sea for the purpose of protecting Europe against a possible nuclear threat from Iran. It’s only the first installment of a four part comprehensive anti-ballistic missile system spending plan over the next decade to deploy both sea and land based radars and interceptor infrastructure hardware in several European locations for the protection of Europeans at a cost of billions of dollars to American taxpayers.

Is this an investment for the safety and security of the United States, or is it merely spending on something which primarily benefits Europe, and for which there will be no return in either interest or principal to us hapless Americans?

Clearly, whatever value which will result from this spending, (probably none at all) will be wasted to foreign beneficiaries in the same fashion as most other so-called defense spending. Cash in the trillions simply disappears never to be seen again. If the Europeans, and other foreign nations, want security from potential Iranian missiles, they should buy it themselves.

Meanwhile, Federal officials, having practically driven the nation’s drug makers out of the business of bringing new drugs to market, have reportedly decided to start the “National Center for Advancing Translational Sciences,” their own multi-billion-dollar government drug development center to help create medicines. (Fox News)

The irony is that, with the reckless spending of our precious tax dollars on dubious FDA regulations and the like, the government has jacked up the costs to private drug makers of bringing a single drug to market to upwards of $1 billion or more. Consequently, private research productivity has been declining for years to the detriment of all of us.

Now the drug makers are unable to come up with new drugs so the government, which caused that problem in the first place, is getting into the drug making business with your tax dollars and calling it another “investment.”

Our Federal government’s recent “investment” in the hated Transportation Security Administration (TSA), purportedly for the safety of the American flying public, has been a loser since its inception, and now thousands of TSA airport security screeners will soon be unionized, demanding even more billions of taxpayer dollars to perform their worthless services.

Thanks to “investments’ like this, the government now has more labor union members than the private sector, and all of them are clamoring for more and more taxpayer money the nation can’t afford to “invest.”

The list of government spending and financial boondoggles is endless. Things like multi-million dollar National Science Foundation research into having shrimp walk on tiny treadmills to measure the impact of sickness on crustaceans; $2 million to analyze 38 million photos on Flickr and cross-reference them against the site's social networking service; a $315,000 study on whether playing the Farm-Ville game on Facebook can help adults develop relationships.

And, how about $80,000 to examine why the same teams always end up leading March Madness; and a $1.5 million grant for scientists to design a robot that can fold laundry -- at a rate of one towel every 25 minutes. The National Science Foundation had a $6.9 billion budget in the year 2010 with which to engage in such folly, as well as outright overlapping of services, fraud, malfeasance, and mismanagement. (Fox News)

As his nation slides slowly into the financial toilet, Obama administration officials demand only the very best when it comes to luxury travel and accommodations. The number of limousines owned by the federal government reportedly rose by 73 percent during the first two years of President Obama's administration; vehicle of choice: Cadillac DTS. The State Department was the recipient of most the new luxury vehicles in the federal fleet, totaling 412 in fiscal 2010, up from 238 in fiscal 2008. (Fox News)

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It’s no secret that The United States is providing billions of dollars in foreign aid to countries that it borrows billions from, according to The Congressional Research Services, Congress's own research arm.

In 2010, a total of $1.4 billion was handed out to 16 foreign countries which held at least $10 billion in Treasury securities, including China ($27.2 million + $1.1 trillion in T-Bonds), Brazil ($25 million + $193.5 billion in T-Bonds), Russia ($71.5 million + $127.8 billion in T-Bonds), India ($126.6 million + $39.8 billion in T-bonds), Mexico ($316.7 million + $28.1 billion in T-Bonds) and Egypt ($255.7 million + $15.3 billion in T-Bonds). (Fox News)

We’re actually sending taxpayer cash to foreign nation’s who turn around and lend it back to us at prime interest rates. We’re spending money into the Twilight Zone so that we can owe it to them as debt. We stupid Americans get nothing in return but the privilege of paying them interest for our largess.

Now Moody's and S&P Investor's Services are poised to downgrade U.S. debt from its current and longstanding top grade investment status to a lower status requiring higher interest payments on new debt. We’ll soon be paying our foreign friends even more.

U.S. government spending – and this is only the tip of the iceberg – is not investment, and it just doesn’t get any more irrational than that.