TRansfer Payments Versus Public Goods

I went through some of the Frequently Asked Question at concerning their recently released study.

“Does your study really tell us who “benefits” from government spending?”

“No. We only measure the amount of money that governments spend on households.”

“Are those government spending totals really money that households can spend?”

”Yes and no. There are different kinds of government spending. Some spending can be easily spent or turned into cash, and some cannot be spent. In our study about 42 percent of government spending is counted as transfer payments. This includes transfers of pure cash to households like Social Security payments, as well as in-kind spending such as Medicare and Medicaid payments that are economically very similar to transfers as they represent government payments for items that would otherwise have to be purchased out of households’ own resources.”

…………………..”However, many other kinds of government spending cannot readily be spent by households. For example, a household’s share of government spending on national defense, roads or police protection can’t be easily traded away for an equivalent amount of money.”

Cheesy answers. They have no opinion, only the commentators have opinions. They say that 42% of government spending is transfers to households. Then they go into the other or discretionary spending as “indivisible public goods”.

I have a long memory; I was introduced to that in a Public Finance Course around 40 years ago. Terming 58% of spending as “indivisible public good” is a ruse. Efficiently managed police may be a public goo,d but wasteful military spending is just waste. Same for NASA and a lot of other pork.

Differentiating entitlements from supposed public goods which are mostly pork, sent to corporate interests, obfuscates the fact that discretionary spending is income transfer from people to corporations and government agencies filled with waste.

I must observe that the arguments based on shares of the pie are misleading as the pie keeps growing and the worth of public goods is not addressed in talking about the pie as a whole and its parts.