The federal government is capable of enormous waste, which obviously is bad news, but the worst forms of government spending are those that actually leverage bad things. Paying exorbitant salaries to federal bureaucrats is bad, for instance, but it’s even worse if they take their jobs seriously and promulgate new regulations and otherwise harass people in the productive sector of the economy. In a previous video on the economics of government spending, I called this the “negative multiplier” effect.
One of the worst examples of a negative multiplier effect is the $100 million that taxpayers spend each year to subsidize the Paris‐based Organization for Economic Cooperation and Development, which is an international bureaucracy that publishes lots of innocuous statistics but also advocates bigger government and higher taxes in America. This video has the unsavory details, including evidence of the OECD’s efforts to push a value‐added tax, Al Gore‐style carbon taxes, and Obamacare‐type policies.
The OECD’s relentless advocacy of higher taxes (as well as its anti‐tax competition agenda) is especially galling since the bureaucrats receive tax‐free salaries. Maybe they would be more reasonable if they were not so insulated from the real‐world consequences of big government.