Topic: Economics
Spending because they can Why does the government use so many resources, while producing so little? And why aren't more people afraid of it?by Gavin Kitchens
(libertarian)
Monday, October 12, 2009
Some people observe in wonder how much spending goes on in government. It happens at every level and is often hidden in layers of bureaucracy and expensively constructed rationale. You see it among federal, state, and local workers, military personnel, government contractors, and private organizations receiving public funding. It is an inescapable reality from within. It is well known that when the end of the fiscal year nears, allocated funds must be spent or lost. Even if losing them is not an issue, from the bureaucrat's perspective, they must often be spent to ensure that the money is not perceived as unnecessary and lost during subsequent allocations. It is true that efforts at savings are undertaken by many well-intentioned bureaucrats, but they don't have the benefit of operating within a market system, the knowledge of the demand for their services that markets provide, or the power to implement significant changes within such large institutions.
Soviet economists Nikolai Shmelev and Vladimir Popov described the overspending phenomenon during the perestroika and glasnost period in the Soviet Union. They discussed how Soviet entities always requested more resources than necessary from the central planners and typically got them. Thomas Sowell, in Basic Economics, discussed the aforementioned relationship where inputs exceed outputs in centrally planned economic systems in which the central planners are unable to allocate resources efficiently. This is very similar to public funding mechanisms, where output cannot be measured efficiently and inputs (or resources) cannot be allocated so they are not exceeding outputs (or income).
People are often afraid of government growth and action for very broad reasons. Proponents of public health care, federal intrusion into public education, and other social programs often cannot grasp why people are so ardently against government action simply because it increases the scope of government. Many similarly wonder at the skepticism over outcomes of foreign policing missions and foreign aid programs, which they deem essential and completely rationale, despite continuous barrage of evidence of wasted resources and abuse of funds. Skepticism over the ability of government to efficiently allocate resources to administer programs, however, is essential and historically validated. Proponents of government action or those who agree with President Obama when he says that the government must take action (as opposed to no action) on numerous issues should take note of this reality. All we have to do is look at the way government programs are run now to understand why we don't want more.
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article are those of Gavin Kitchens only and do not represent
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