The almost erotic pleasure of spending money that others have earned and saved is one reason people put up with the tiresome aspects of political life. And now the government's response to the financial crisis, including the semi-nationalization of nine major banks, has blurred -- indeed, almost erased -- the distinction between public and private sectors.
Hundreds of billions of dollars that the political class would have liked to direct for its own social and political purposes have been otherwise allocated. That allocation, by government fiat rather than by market forces, must reduce the efficiency of the nation's stock of capital. Which in turn will reduce economic growth, and government revenues, just as the welfare state -- primarily pensions and medical care for the elderly -- becomes burdened by the retirement of 78 million baby boomers.