Home Archived Your Money Goes to Washington… The end.

Your Money Goes to Washington… The end.

We must reject the Washington insider economy and embrace the Main Street competitive economy – its fairness, its empowerment, its morality.

The Left has forever been incessantly complaining about income inequality and the unfairness of wealth distribution, but I never hear them complaining about the biggest cause of income inequality and disparaging wealth distribution of all… big government.

The two richest counties in America, and five of the seven richest, are within commuting distance of the U.S. Capitol.

The figures, from the Census, are in median household income dollars.


A very substantive question might be: Why has Washington D.C. become the richest metropolitan area in the country?

Despite nearly 50% of all representatives being millionaires, elected officials are only a small portion of the problem.

The Washington establishment is more than just the president and the 535 members of Congress.  They are a part of that machine, to be sure, but it also includes their staffs, employees of executive agencies, the lobbyists who canvass them, and the government contractors that reap the rewards.

As the federal government expands (as it does without regard for the party in power), the cycle feeds on itself, increasing in size and strength with the endless flow of taxes from the heartland to the capitol.  Ross Perot predicted a “giant sucking sound” heralding all of our money and jobs flowing south of the border as Congress enacted NAFTA.  So too it is with your money to the leviathan in D.C.

Every major city is know for something.  Detroit once known for cars, Hollywood for movies, and New York for financing the economy – but Washington mostly makes more government.

So, how does big government enrich Washington and its bottom-feeders?  Well, there are a few ways.

Most straightforwardly but definitely not most importantly, federal salaries are high and the benefits even higher.  The average federal employee makes $84,153, about 50 percent more than the average private-sector worker.  Benefits such as health insurance for life make the gap even wider.  As government grows, more high paying jobs are needed.  You get the picture.

But the real money comes when those bureaucrats cash out of government and pass through the revolving door into the private sector as consultants or lobbyists (though often still drawing a federal pension), monetizing their public sector experience to help clients win subsidies and game regulations.  President Trump’s executive order will help with with this, but I have no doubt they will find some way around it — there is too much money at stake for them not to.

Lobbying the federal government is a $3 billion-a-year business if you only count money reported on federal lobbying disclosure forms.  The real tab is much higher and includes legions of consultants and quasi-lobbyists.

Whether it is termed public-private partnership, mercantilism, industrial policy, or crony capitalism, regrettably a great deal of economic activity that masquerades today as free enterprise is not.  Now, I must confess I’ve never liked the phrase “crony capitalism.”  It suggests capitalism is corrupt when American free enterprise is actually the most fair and moral economic system ever devised by the mind of man.  No other economic system has lifted more people out of poverty, but I digress.

The government-dependent class is massive.  Washington companies haul in more than $100 billion a year in federal contracts and growing.  The 32 largest contractors in the area accounted for 20 percent of all federal contracts in 2012.  Crony Capitalism… the money pit in which your hard earned money disappears.

More federal spending means more wealth in the city that makes those decisions.  More regulation also means more wealth there.  A more complex tax code and higher tax rates means more and yet more.

The more businesses profit from federal contracts, bailouts, and regulatory arbitrage, the more swanky restaurants, opulent homes, and corporate headquarters Washington and its environs get — and the more of your money that stays in our Capitol.

Next time you file your taxes, whether your payment goes to Cincinnati, San Francisco, or Charlotte, keep in mind that the money all ends up in Washington.  Where it stays.

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