Government Waste—The Contingencies Make It Inevitable

https://grantcoulson.files.wordpress.com/2014/04/incentiveseverywherepicturecorrect1.jpg?w=444&h=288

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

     Wasting in money in government is so widespread no one pays attention. Why? It’s not their money.

Great Moments in Government Waste and Inefficiency
Daniel J. Mitchell

It’s difficult being a libertarian.

In addition to all the other challenges (such as trying to convince people stealing doesn’t become okay simply because the government is the middleman), I get conflicted about government waste.

You’re probably thinking I’m wandering off the libertarian reservation. After all, aren’t libertarians big opponents of boondoggles, government waste, and pork-barrel spending?

All true, but here’s my challenge: I also don’t want “efficient government.”

In other words, our goal should be to shrink government, not to make it “work better.” To understand the point I’m making, ponder these questions:

Do we want government to efficiently lure people into dependency?

Do we want government to efficiently socialize health care?

Do we want government to efficiently cartelize the agriculture sector?

I hope the answer to all these questions is “NO,” which is why I generally focus my work on structural changes to shrink the size and scope of government.

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    The only way to stop wasting so much money is to give them less of it.

But every so often, notwithstanding everything I just wrote, I can’t resist pointing out really absurd examples of wasteful spending. And today we have two jaw-dropping examples.

We know that government bureaucracies like palatial buildings and that cost overruns are the rule rather than the exception. Well, one of the new bureaucracies created by the Dodd-Frank bailout bill is setting records for extravagance with its new headquarters.

    The newly created Consumer Financial Protection Bureau is renovating the Washington, D.C., headquarters it rents—at a cost per square foot that is more expensive than Trump World Tower in New York City. The CFPB project is estimated to cost taxpayers more than $215 million… Cost projections have increased $65 million in six months and $120 million since last year’s estimate. Some of the building’s extravagant features include a four-story glass staircase, two-story waterfall and a sunken garden.

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   Of course, to give them credit, a glass staircase, waterfall and sunken garden do make people regulate better.

But what’s really amazing is that all this money is being spent on a rented building and that the cost of renovating is far greater than what was spent on building (yes, building, not just renovating) some of the world’s most famous landmark structures.

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   “Nobody washes a rental car” in the hands of government spendthrifts becomes “You have a rental car you wash it, rebuild it, polish it and repaint it.”

Now for our second example.

We’ve all heard about how big chunks of education spending get wasted on bureaucracy and don’t get used for classroom instruction.

And we read about how welfare bureaucrats consume a lot of money that supposedly is targeted to help poor people.

This principle also applies to other forms of government spending.

CNN reports that the federal government’s program for emergency food aid around the world is such a cluster-you-know-what that barely a bit more than one-third of money is actually spent on food for crisis-stricken regions.

    International typhoons, hurricanes, and earthquakes leave behind devastating scenes of poverty and need. If you had about a $1.5 billion every year to send food to such desperate areas, how would you do it? …The way the U.S. provides international food aid is an antiquated and bureaucratic tangle. Food largely has to be purchased here in the U.S., and then shipped on boats by U.S. cargo carriers to the trouble spots. The Government Accountability Office says that 65% of the money for this aid program is spent on shipping and business costs – not on food. … it’s a system that has helped shipping companies and unions win billions in government contracts, companies like Maersk. …There’s also the transport workers unions. …The two leading maritime unions gave more than “three quarters of a million dollars to members of the current House of Representatives in the 2012 election cycle,” according to the Center for Public Integrity.

Geesh, what a typical example of insider corruption.

This is yet another piece of evidence for my view that disaster relief is not a function of the federal government.

P.S. Regarding the theme of today’s column, Fred Smith, the founder and former President of the Competitive Enterprise Institute, told me on more than one occasion that we should “be thankful we don’t get all the government we pay for.”

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    The contingencies of real life are such that an individual is very careful in spending his own money. After all, it’s his money. In the government, one doesn’t earn the money, one engages in politics to get it. Then it’s “yours” to spend as you wish.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

 

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