Quote of the Day: Real Economic Power

From Robert Lawson and Richard Alm, (hat tip Professor Arnold Kling)

In 2010, a tiny cabal of 535 individuals — just 0.00017% of the population — spent $3.5 trillion, or about 23% of the $14.5 trillion U.S. economy. That leaves 77% for the other 99.99983% of us.

The group is the U.S. Congress — whose members have enormous powers to tax and spend. And they've used them to grab economic power well beyond anything found in the private sector.

If we look at the richest 535 private citizens, measured by the Forbes 400 list combined with estimates for the nation's next 135 wealthiest people, we estimate these rich people probably have about $166 billion in spendable income each year.

Internal Revenue Service data from the 535 highest tax returns give a somewhat lower figure of $135 billion.

Thus, the members of Congress wield 20 to 25 times more economic power than the same number of richest private citizens in the country.

In a heavily politicized economy, inequality mostly springs from actions of political agents whose escalating interventionism bloats the bureaucracy and the pockets of political stewards by compelling economic agents, not only to comply and finance their desires (at the expense of the consumers) but to also lobby for privileges. The result is a vicious cycle of feeding the leviathan to unsustainable levels.