What Could Cost Trillions And Is Killing The Economy?



Nobel Laureate in Economics, F. A. Hayek, fought totalitarianism and communism, and from beyond the grave he is taking on a new foe – political bureaucracies.

Hayek – an economist whose theories inspired George Orwell to write his epic book 1984 and whom many credit for helping to bring down the Iron Curtain through his work as an economist — is now delivering a message from beyond the grave about the demise of the U.S. economy. In an interview that took place before Hayek’s death in 1992, he warns against how big government and the growth of the civil service have the potential to doom the American economy.

Kenneth J. Gerbino, CEO of an investment management company and founder and Chairman of the 1980 reform advocacy group the American Economic Council, uncovered the interview that is the centerpiece of the new documentary film The Hayek Prophecies (www.thehayekprophecies.com). In it, Hayek decries the growth of the civil service as the poison pill that could put the country in a stagnant or slow growth mode with inefficiencies and waste.

„Hayek believed that the swelling of the civil service would grow government to such an unwieldy size that it would become an unsustainable beast, dragging down the government and the economy because of its endless hunger,” said Gerbino, also producer of the film.

There are currently 2,392 bills working their way through the House and 1,291 bills in the Senate. It goes without saying that besides the $20-30 billion in pork in these bills there will be more government agencies, bureaus and departments created to administer and regulate any new laws that are passed. They will then further complicate and slow down the real economy. Needless to say more regulations and regulators are being added to the budget every year.

The government should be dismantling agencies and downsizing and allowing the people of this country to flourish by allowing them to spend their money instead of the government.

„Tax money going toward social security should not go toward hiring more people to inhabit more government jobs,” he said. „Taxes should be reduced giving elderly people money to buy food and pay rent. Because of the thousands of new regulations to various laws passed every year, the bureaucracy to administer these regulations and guidelines waste hundreds of billions per year.

The Heritage Foundation reported the Government Accountability Office (GAO) says that current reports of wasteful duplication include 342 economic development programs; 130 programs serving the disabled; 130 programs serving at-risk youth; 90 early childhood development programs; 75 programs funding international education, cultural, and training exchange activities; and 72 safe water programs. Gerbino states that most of these agencies probably could be consolidated into three or four agencies eliminating overlapping work and reducing employed civil servants by 30-40%. Washington spends $25 billion annually maintaining unused or vacant federal properties all for the civil servants.

The civil service has created its own perpetual motion and continues to expand, costing taxpayers more money but in many ways costing private enterprise untold legal and accounting costs to comply with regulations many of which are not needed. These costs are then passed on to consumers. The civil service expansion defeats the purpose of actually shrinking government, which makes the political call for smaller government nothing more than a punch line to a bad joke. „If our leaders really want to reduce the size of government, they should listen to Hayek and start with the civil service.”

About Kenneth Gerbino

Kenneth Gerbino is head of Kenneth J. Gerbino & Company, an investment management firm now in its 37th year. The company manages private equity accounts and the Gerbino Gold Group, LLC, a private hedge fund that invests in precious metal mining stocks. Ken is advisor to the publicly traded Precious Capital Global Metals & Mining Fund traded on the Zurich Stock Exchange. Ken was the founder and Chairman of the American Economic Council (AEC), a nationwide economic reform group that was credited with the passage of the United States Gold Coin Act of 1984, which established the United States Gold Eagle coin. AEC seminars included participation by Alan Greenspan, Noble Laureate F. A. Hayek and Robert Bleiberg, ex-Editor-in-Chief of Barron’s.