Not content with spraying taxpayer’s cash around like a drunken fleet ashore, our Lord and Masters are actually making us even poorer:

The efficiency of the benefits system has plummeted under Labour, according to official figures.

Productivity
in the welfare system – run by the Department for Work and Pensions –
dropped by 25pc in the five years to 2003, the Office for National
Statistics said.

It is the latest sign that the
increase in public spending is not being matched by similar increases
in the state sector’s performance.

Leave aside the effects of the tax wedge (all taxes distort behaviour, the larger the amount collected the larger the distortion), of the insane waste of some of the spending and concentrate just on labour productivity for a moment. 

It is a truism that average wages in an economy are, in the long term, determined by average productivity in that economy. If manufacturing, say, becomes more productive then that effect raises wages across the economy as manufacturers are able to bid up wages at the expense of other areas of the economy. Thus the average rises for all.

This leads to all sorts of interesting effects such at the Baumol Effect, which leads to, other things being equal, services becoming more expensive relative to manufactures…the productivity of manufacturing tends to rise faster than that of services but the wage level is determined by both together, not each separately.

But what does it mean if a sector of the economy actually has falling productivity? The whole system goes into reverse. Lower average productivty across the economy means, other things being equal, lower wages across the economy.

So there you have it. The startling incompetence of the bureaucracy, the lowering of productivity in the sector, is making us all poorer, dragging down everybody’s wages.

Aren’t we lucky little boys and girls to be ruled by such wise and omniscient masters?