Tuesday, May 11, 2010

Guidelines for Supporting Government Run Services

In my experience, government incompetence is much more common than effectiveness. But since I'm fallible, we should look back to history and around the world for a more complete view. Doing so should make it obvious that incompetence and corruption are the standard. A honest government that works efficiently is a rarity, most governments are very inefficient and very corrupt. It is natural for politicians to use government to further their own ends, as the saying goes, power corrupts, even Obama doesn't seem to be immune from shady deals and using power to reward those who've supported him. The favorable deals labor received with GM and the health care bill are just the most visible examples. It's been well known and standard operation to give certain government positions to favored cronies as a reward. Ambassador to the Bahamas or Micronesia to big fundraisers--that government is used to enrich and reward should come as no surprise. The bigger government becomes, the more that can be dished out as spoils, which is one of the principal reasons for a small and limited government.

I support government when it can be the most efficient method to do something. Government is horribly inefficient at providing national defense, the Boeing tanker contract that is STILL being debated is just one example of waste and corruption, still government, bad as it is, is still the most efficient way to provide national defense. Same with roads and police and fire.

It is not enough that government can do something well, it must also do it for a good price, that is offer a good value, better than the private sector. That's a big hurdle to climb and in most cases, government does not offer a better value compared to the private sector. Medicare administration costs do not count the cost of fraud which is substantial. Government provides more than 50% of the health care services and accounts for the majority of spending on health care in this country. As a result, government cannot be exempt from blame for the high health care costs of this country, rather it is a major contributor to the problem.

Speaking of problems, one of the biggest problems with regulation is the regulators. If only they would do their jobs! But as an internal SEC report revealed, often they are downloading porn when they should be regulating, incompetence is the norm, not the exception. People are right to be skeptical and cynical when it comes to government--it has failed so often and there are structural and systemic reasons for that. One of the biggest is that it's a monopoly provider so it lives on despite poor performance and outright failure. When the SEC fails to do provide regulation, it doesn't close or go out of business, it continues on, often with more money. Amtrack and the US Post Office continue to lose billions year after year, a business would have gone bankrupt and be forced to end operations. Fannie and Freddie announced large losses for the foreseeable future, without implicit and now explicit government involvement, they would never have gotten so large and out of control. Their regulator, failed to regulate them and protect the taxpayer.

I will support government involvement if it can be shown that government is the most efficient provider. That bar is rarely achieved. The only exception is if that would endanger our liberties. Even if a gulag style, concentration camp method of forced production were the most efficient, I would be against it.

I believe my standards for supporting government are reasonable, and logical. I hope that others here will be just as reasonable and logical in deciding when government is the best choice.

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