During the recent 16-day partial shutdown of the federal government, the U.S. economy continued to grow, according to this report on a recent survey by the Federal Reserve. In seven of the Fed’s 12 banking districts, growth was moderate and in regions such as Boston the economy continued to expand. Manufacturing was on the upswing, hiring increased in five districts, and in most regions consumer spending increased. This represents only modest economic growth but any growth is welcome in these hard times. It happened during a partial government shutdown, and therein lies a lesson.
Economic growth does not come from government and government is not necessary for growth to occur. Economic growth happens when independent individuals invest and practice entrepreneurial activity, producing goods and services that consumers choose to buy. This creates jobs and generates wealth from the ground up. Despite what left-wing economists and the Pope say, this is not a process of “trickle-down.”
That happens when government confiscates wealth at punitive levels. Those funds must then trickle down through layers of bureaucratic sediment before reaching their politically correct beneficiaries. In other words, a tax dollar cannot go out on the town in Washington and return to some district fully intact. As it happens, the partial-shutdown was also educational as to where the money goes.
A high percentage of federal employees turn out to be “non-essential.” The Federal Department of Education proclaimed 95 percent of its employees non-essential but as George Will said that was 5 percent off. Education is the responsibility of the states, not the federal government. The federal Department of Education has only existed since 1980 and was a payoff to the National Education Association, the teacher cartel that endorsed Jimmy Carter for president. The department is now a flywheel of waste, fraud and abuse, including armed squads fond of bashing down doors.
During the partial shutdown, 90 percent of EPA employees proved non-essential, same for the FCC, SEC and HUD. At NASA it was 97 percent non-essential. At the same time, the entire federal government is non-essential for economic growth.