Sunday, January 15, 2017

The Myth That Government Has Controlled Its Growth

An article by the economist, Joseph E. Stiglitz appeared on Project Syndicate and containing the statement, "The only way Trump will square his promises of higher infrastructure and defense spending with large tax cuts and deficit reduction is a heavy dose of what used to be called voodoo economics. Decades of “cutting the fat” in government has left little to cut: federal government employment as a percentage of the population is lower today than it was in the era of small government under President Ronald Reagan some 30 years ago." I contend this very misleading. Well, I hate to tell this fella but several trends taking place over the last several decades have merely generated the myth he is repeating.

The Real Size Of Government Is Hidden 
Using and bending statistics such as the total number of employees on the government's payroll is very misleading and tends to mask the way government has expanded into every facet of our lives. The role of government in America is changing on the federal, state and local levels.  Mandates often unfunded have been heaped upon business organizations and private citizens. If unchecked government grows, it is the nature of bureaucracy to expand.  The use of sun-set legislation is underused or the bar set too low when it comes to extending and renewing government bodies. Politicians and bureaucrats deterred from expanding or funding programs by a few vigilant citizens, wait and find creative ways to reach their objective at a later date.  Creating special bonds, attaching fees to needed services or narrow taxes that go on to fund new authorities, commissions, and districts.

The government need not be efficient, we see this in issues small and large, for example in our currency. Not only is the penny still being used, four new versions of it were released in 2009.  The penny is totally antiquated and illogical if an employee is paid only $12.00 per hour it cost twenty cents per minute. How can you afford to pay that employee to count and handle pennies, when the labor exceeds its value? According to the “citizens to retire the penny” it cost the Country more than $15 Billion Dollars annually, but to the government that matters naught. The government and the institutions closely related to it are insulated from the economic reality of justifying their own existence that is faced every day by the business sector.

The Government hurls money at inefficient programs to assist the poor.  Government has spent a fortune on housing for low-income people offering low prices to the applicants, they compete with private enterprise but due to subsidies are able to “cherry pick” those that will be good residents, rejecting to the streets the more troubled.  They ignore the fact this is in conflict and totally sidesteps their mission of helping the most needy.  Food stamps do not limit the user to economical healthy basic foods but allow even a recipient to pick up steak and lobster that they can give to friends and family at Christmas, a blind eye is turned towards this glaring flaw. How convenient that failure can be construed as proof that more must be done.

Local Example Of Public-Private Partnership
A popular way for the government to hide its expansion but garner praise for promoting growth is to get involved in Public-Private Partnerships.  These are often touted as our savior because it can allow a project to be completed sooner or make it a possibility in the first place. This vehicle has become popular for highways, airports, wastewater facilities, prisons, student dormitories and even entertainment or sports facilities. Underplayed is the great risk for abuse with the devil often lurking in the details that are buried deep within complex agreements with contract periods of 25 to 30 years or longer. A poorly crafted agreement can become very expensive for the taxpayer if there are fewer users than expected for the project and the public partner agreed to pay a minimum fee no matter the demand.
I often sit and have coffee in a chair near the front window in the building where my office is located, this window looks out on what might be called the crossroads of America.  Across the street is a Target store that was recently expanded into a super-target, behind it a toxic waste site cleaned up to where it may be used in a limited way.  A bank on the corner that was built ten years ago after demolishing the preexisting buildings has changed its name five times through the years before closing and taking with it the jobs that bank branches had once provided.  Miscellaneous stores and offices line the street, coming and going, with all for lease signs that accompany such a changing landscape where big business, consolidation, and automation are having their way.

When government pours money into a sector of the economy it slowly morphs into a quasi-extension of the government we have seen this in many the institutions of higher educational and large healthcare facilities. What amazes me as I sit in my coffee is that a high percentage of the vehicles that go by are government or on government related business. Empty city buses, police cars, fire trucks, post office, housing authority, park and code enforcement department vehicles drive back and forth. Then there are the vehicles of quasi-government units like utilities, which are regulated monopolies, this would extend to and cover the groups trimming trees and running new lines and all those vehicles providing services to help meet the many government requirements that are all paid for with taxes and fees. The trend of government to outsource much of the work it did in-house decades ago has masked a great deal of its growth. Yes, the government has crept into every nook and cranny of the economy.

Unneeded quasi-government organizations by nature reach out to expand the influence and power of their directors. Instead of focusing on the business of government and simplicity, this new proactive movement, one of  "cuteness", disguised in the shawl of flexible and diversity is being expanded, and we are paying the tab.  Government is proud of pet projects that allow bureaucrats to experiment and try new things without the personal financial risk of a businessman and creates an environment where they can be creative on our dime. This is a problem for concern. The best time to kill a monster is while it's still small, that time has passed, now we can only hope to slow its growth through starvation, and that is unlikely.

1 comment:

  1. One of the things that I see is the hiring of consultants for permanent staff positions. There are organizations in DC where the management and a handful of other positions are civil servants but 80% of the workers are contract employees (getting really good salaries by the way). These contract employees are often extremely bureaucratic. The greater the bureaucracy the greater the work and the long term security for their positions.