A Case Against Public Spending

Specially in times of economic crisis, governments wants to increase public spending. The argument goes that it creates jobs and encourages consumption. Let's pause for a second. If those arguments would be true, a country could get out of a economic crisis by putting all their citizens building pyramids, or instead, just digging up and covering holes in the ground.

Also - there is no such thing as public spending. All the money that the government spends is private, as it is taken (or more politically correct - collected) from the citizens.

My arguments against public spending are the following:

• First of All... money can not be created out of nothing. Governments can only finance themselves by either a) borrowing and therefore creating debt, a liability imposed on future governments and generations; b) printing more money, which effectively reduces the wealth of everybody holding money and creating inflation; or c) increase taxes.
• Government has no way to verify whether its investment is a worthy, needed investment or not. For what is worth, it may build pyramids in the desert. In the private sector, the validity of all investments is tested by the means of profit and loss.
• There is a constant pressure on the government, from lobbies, special interest groups, companies, cities, regions for a "piece of the pie". The government is made of people, who as human beings are sensitive to these forces.
  
• By investing in public projects, resources (capital, workers, equipment, land, ...) are diverted from other projects which would be managed more carefully, and more efficiently.
  

Why it's generally assumed that the government is better suited to manage the money of the citizens than the citizens - who provide the money - themselves remains a mystery to me.

Parkinson Law also dictates that over time, government will want to spend more, and more and more, and that it will also need constantly more people to manage all the contracts and subcontractors.