George Rebane

A new Harvard study paints a pretty grim picture of what we really pay for all those earmarks that political naifs have been using to measure the effectiveness of their members of Congress.  As with all government activities, pork projects impact the private sector in both how much money it has to spend, and where it wants to spend it.  Bottom line, pork kills jobs.

In my lexicon the monies we pay to government are divided into taxes and tribute.  Taxes are the funds necessary to pay for government services that we all agree are needed, and cannot effectively provide through the private sector.  We thus come together, erect a government to manage our joint interests, and pool our money to pay for its operation.  Tribute is the monies in excess of taxes that a government, growing in size and corruption, takes from us by sheer force of arms and against our will.  For obvious reasons, politicians disguise tribute as a tax.  Where you draw the boundary between the two goes a long way to identify and label your socio-political ideology.

In that light, pork is funded by tribute.  And the Harvard study now sprinkles academic holy water on what many of us have known for years.  The study is also summarized in today’s (27may10) WSJ here where we read –

Part of the problem is that public money is "crowding out" investment opportunities for firms. "Some of our results point towards the role of competition for state specific factors of production, including labor and fixed assets such as real estates," the authors write. "Public spending appears to increase demand for state-specific factors of production and thereby compel firms to downsize and invest elsewhere." They add that "We also find evidence that the effects are most pronounced in sectors that are the target of earmark spending."

Democrats and Republicans have promised earmark reform for years, only to abandon the effort in favor of "bringing home the bacon" and incumbent protection. The Harvard study suggests the Congressmen are really bringing home less economic prosperity.

More on the study is reported by Heritage Foundation in ‘Harvard Study – More Government Spending Means Fewer Jobs’, and you can read Harvard’s report and the surprise at its findings here.  Closer to home, perhaps more people will now come to understand our Congressman Tom McClintock's position on pork.