Government spending will save the day!

Actually, it won't.

The government is an appallingly wasteful institution. This very week, we've been treated to the amazing sight of Number 10 spending £100,000 of our money building a website which is rubbish, and should have cost no more than £5,000 under any circumstances. And did I mention that it's not even finished yet?

But most government spending is on the machine of government itself, not on anything that generates benefits or infrastructure. I have seen figures that show that well-managed government spending projects spend less than 50% of their budget on the things that they are buying and they never achieve value for money. The remaining amount (more than 50%) is spent on the business of spending the money. Burning Our Money says that sometimes as little as 25% of a budget is actually spent on buying the things government want to buy. The rest of it is pissed up the wall on things like diversity managers, environmental advisors and other valuable things. Can you imagine any business surviving with such a high cost ratio?

Let's take one project as an example: the NHS IT project. It's already cost serious money (let's say £1 billion for a round number) and has achieved nothing. Accenture has already walked away, fully aware that it's not going to work. So, you might think it's not that bad, £1 billion has at least found its way into the pockets of speople who have spent the money elsewhere and so we haven't really lost anything. But we have. That £1 billion has pulled money out of circulation that could have been used to start a hundred new businesses, creating more genuine sustainable wealth.

You might say that government tax credits help out those who are struggling, but even tax credits are a complete sham. See this as well. And this.

So they are very bad at spending the money on things that help you and me. And they're hoovering out our wallets every day, in all sorts of new and exciting ways. Taking money that you or I could spend better on things that are important to us. Private pensions, private health care, private or semi-private education ... all these things could be affordable if you kept 100% of your income and spent it on things in proportions that matter to you. Imagine if fuel cost 40p a litre! Well, it pretty much does. The other 80p is funding social engineering projects to try and keep Gordon Brown in power. Imagine if a pint cost a pound. And so on and so on. And if we were all buying stuff that we wanted and setting aside money for rainy days based on our own priorities, how much happier would we be?

More importantly, with all that money washing around in the economy, how much more opportunity would there be for people to make more of their lives, to genuinely innovate new ways of making profits and improving our lives? Government spending and government-created jobs may sound attractive, but they are ALWAYS a nett drain on the economy. They do not sustain themselves, they always need to dip into your wallet and mine for their next paycheck.

Think about that the next time a minister or shadow minister talks about spending (your) money, creating jobs and improving our lot. And notice that neither Labia, the LibDums nor the Tories are talking about taxing less and spending less. None of them want to reduce the size of their little empire. (And the EU probably wouldn't allow it anyway!)

(Read Timmy for genuine sense on matters economic.)