Why Government Needs to Tax, and Why Government needs to Spend


There are two important things we have to understand about federal government taxation and federal government spending. Just because I mention these two things in the same post, don’t get hung up on the false premise that you cannot do one without doing the other. It may be better to do both, but it is not essential to do one before the other.

  1. The federal government needs to control the misspending in the private sector by the obscenely wealthy
  2. The federal government needs to make investments in society that are not profitable for the private sector to make

With the current level of economic disparity, the obscenely wealthy have so much money that they can’t find useful places to invest their money. They end up inflating the value of stocks and other assets to the point of creating a bubble that must burst at some point in time. The obscenely wealthy’s hoarding of money prevents the rest of us from having enough money to buy the things we need and keep others (and ourselves) employed. Taxing the wealth and not giving trillions of dollars to the already rich is one way to exert this control. Making sure the rest of us have some money is not helped by cutting the budget for government services the rest of us use.

There are investments in infrastructure, education, and health care that a society needs. These are not investments that are profitable for the private sector to make. These necessities really need to be provided at cost rather than being hugely profitable to the rich. Only the federal government can make these investments in the way most beneficial to the society.

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