The fact that the private sector did not undertake these projects indicates that these projects were not demanded or prioritized by consumers. For example, if the government decides to build a pyramid, it is evident that most people regard this as a low or non-existent priority.

To complete this project, goods and labor must be purchased away from the private productive economy. The government is not a wealth-producer since it has to impose taxes on wealth-generators in order to fund the building of a pyramid. The more pyramid-building that the government undertakes, the more wealth is taken away from wealth-generators. It follows that the level of tax is directly determined by the size of government activities. All that governments do require resources to be extracted from the private economy.

In a money economy, the government will tax and transfer the received money to various individuals who are employed, directly or indirectly, by the government. The government employees can now exchange this money for various goods and services and engage in the consumption of wealth without making any contribution to the wealth formation.

Government uses various methods to divert wealth from wealth-producers toward its activities. These methods include direct and indirect taxes and levies, monetary inflation as a result of government borrowing from the central bank, and borrowing from the private sector. The method of diverting wealth is of secondary importance. What matters here is that wealth is taken from wealth-producers. The more that is taken, the higher the effective tax imposed on the wealth-generating private sector will be.

When government borrows from the private sector, it cannot repay the borrowed wealth. Only wealth-producers, who are borrowing from each other, are in a position to repay from their future production of wealth. All that the government can do is to pay back the borrowed wealth by means of newly-created money, or through new taxes, or through new debt, thereby further impoverishing wealth-producers. It amounts to a process whereby the government borrows from you in order to repay you plus taxes, debt, and inflation.

Similarly, when government borrows from the central bank, it effectively causes the central bank to hand the government newly-generated money, which is employed to divert wealth from the private sector.

With respect to the government borrowing from overseas, the burden of servicing the foreign debt will fall on the private sector given that the government is not a wealth-producer.