Keynesian wealth destruction

Posted by: Barthélemy Barbancourt in Blog on Sep 21, 2011

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One of the most odoriferous tenants of Keynesian economics is asinine idea that any government spending creates wealth. Here is a story that shows how poorly run government programs actually destroy wealth.

Shortly after taking office, President Barack Obama defended the weatherization portion of the stimulus bill in a February 2009 CBS interview, saying it would immediately put people back to work, reduce energy costs and lay the groundwork for future energy independence.

In total, the stimulus program allocated about $5 billion to the cause of home weatherization, outfitting homes with the latest green technology in order to reduce energy prices.

It’s now three years later, and it appears the weatherization program has gone down a road of waste, fraud and abuse.

Among his findings were that 14 out of 15 “weatherized” homes failed final inspection because of poor workmanship and 12 out of 15 homes contained substandard work that could have “resulted in significant property damage or injury to the homeowners.”

But Friedman’s report didn’t stop there.

In one weatherized home, 11 out of 14 items the weatherization contractor installed failed inspection. Another home had an improperly installed exhaust system that turned out to be a potential fire hazard.

The audit also found that the number of gas leaks discovered was “alarming.”

Worst still, Friedman reported that contractors hired to weatherize homes charged homeowners prices significantly higher than market value for the items they installed.

Much of the "work" will have to be re-done. The money spent for the faulty work was wasted and our tax dollars have been effectively destroyed. This is just one tiny example of how government destroys private sector wealth through wasteful and fraudulent government boondoggles.

This is why government must be drastically cut before any taxes are increased.