…is the federal government. Or, the 535 members of Congress + 1 President.
If my calculations are correct, those few currently “control” about the same amount of income as the 3 million, or so, in the much ballyhooed Top 1%. Thanks to commenter, Xerographica, for pointing that out.
I wonder why those who fret about 3 million people earning that much money, by and large by producing value, don’t seem at all bothered by the 536 controlling just as much, through taxing and spending.
Because we vote for our elected representatives? Because they’re not spending the money directly on themselves?
These are reasons we should care even more about the 0.000179%, not less.
I believe many people will intuitively defend Congress having so much spending power by saying, but they are held accountable by our votes, we get to choose them.
How has that worked out for us? Not well. Public choice economics tells us why our intuition about elections is wrong. Thomas Sowell explained it well in his book, Applied Economics. I wrote about it in my post, How to Get People to Respond to Other People’s Desires. This is Sowell’s key paragraph:
Politics and the markets are both ways of getting people to respond to other people’s desires. Consumers deciding which goods to spend their money on have often been analogized to voters deciding which candidates to elect to public office. However the two processes are profoundly different. Not only do individuals invest very different amounts of time and thought in making economic vs. political decisions, those are inherently different in themselves. Voters decide whether to vote for one candidate or another but they decide how much of what kinds of food, clothing, shelter, etc. to purchase. In short, political decisions tend to be categorical, while economic decisions tend to be incremental.
I can also imagine some people defending the immense spending power that has been concentrated into the Federal government vs. the Top 1% by saying, well, they’re not spending the money on themselves.
Milton Friedman explained why this should make us more concerned in his Four Ways to Spend Money. Government spending falls under Type IV spending — spending other people’s money on other people. Friedman explained that with Type IV spending you have little incentive to spend it wisely since you don’t pay the consequences if you’re wrong or receive the benefits if you’re right.
Though, sometimes politicians do get benefits. I get the pleasure of driving over a bridge each weekday named after a still living Senator from my state, for no other reason than he played politics with the rest of the 534 folks in Washington to get enough of them to agree to spend our money on that bridge.