What Should Government Do?

What Should Government Do?

On the Fox News Channel the 6 pm – 7 pm show is “Special Report with Bret Baier.”  The last twenty minutes or so is a roundtable discussion called the “Fox All-Stars.”.   It has four individuals including Mr. Baier as moderator.  On a show in May the discussants were Tucker Carlson, Kirsten  Powers, and Charles Krauthammer.  Mr. Carlson made an observation about the proper role of government in our lives.  His position, as I recollect, was that it should be reduced because it is philosophically wrong to say nothing of its abysmal track record.  Ms. Powers disagreed, believing that government can be a force for good.  They went back and forth on this issue for a few minutes.

It got me thinking about the proper role of government and  at which level: local, state, or federal;  any such activity should take place.  My belief, similar to Mr. Carlson’s, is that the influence and intrusiveness of government in our lives should be drastically reduced.  The incentives facing government employees are to expand its sphere of influence.  They need to have people in distress, the more the better.  This translates into bigger budgets and more control.  On the other hand, private charities engage in a form of triage.  They rank order those in need so that resources tend to go to those in the most dire straits.  They do this because their resources are limited; simply put,  they can’t print money.  In order to induce people to contribute they must show that the funds are well spent.  At the same time, their approach causes the  demands on them to be smaller than those on government agencies because they “size up”, if you will, those who request help.  Government agencies are notoriously lax in doing so.  A pulse is usually all that is required, sometimes that isn’t even necessary.  Today, there are close to eleven million people on disability in this country, even as the economy becomes more service-oriented and manufacturing has become safer.  Would these same people who have no qualms about taking funds from the ‘government’ be as likely to take money from their fellow citizens if they had to get it via the Red Cross, the Salvation Army, Catholic Charities, etc.?  I doubt it.

Even if one believes that government should do many of the activities it does the question arises as to which level of government should do it. Again, it is my belief that as much as possible should be done at the local level.  Welfare reform in the mid-1990s resulted in major programs being transferred to the states.  By all accounts this reform of the welfare system was a resounding success.   On the other hand we have the spectacle of FEMA and not just Katrina’s debacle.  If a tropical storm trashes beach houses built in areas that are susceptible to storms like coastal beaches, FEMA will rebuild homes in the same spot as they went down.   There are instances of houses being rebuilt at taxpayer expense multiple times.  Why should someone from Montana or the Upper Peninsula of Michigan which get snow storms and manage to take care of themselves subsidize this behavior?    Does anyone think that a program overseen and funded locally would be as generous as a federal government bureaucrat is in enabling that sort of behavior?  Of course not.  They are close to the scene and recognize risky behavior.  Folks at the federal level don’t have the same incentive because it isn’t their money in any meaningful sense.  As Milton Friedman has pointed out: I would spend your money on a third party with minimal regard for the results.

While doing things at the state level are superior to doing them at the federal level, it still leaves much to be desired.   I live in Western NY.  The politicians in Albany are predominantly from the New York City area since the bulk of the state’s population lives there.  Policies enacted in Albany are standardized for application across the State.  Seems reasonable, however, in practice this means one size has to fit all.  Needless to say, this can lead to serious waste as officials follow the playbook irrespective of the logic of doing so.  They don’t have the flexibility of adapting to local circumstances.

We, also, have the spectacle of state officials around the country signing up people for food stamps because they view that as a way to bring federal funds into their state.  The long-run implications of making people less independent seems to be irrelevant to them.  It is doubtful that this would occur if the funds were taken solely from one group of residents in the state to hand over to another.  Or, even better, from citizens of the same county to others in the county.   Again, local agencies and, especially, private ones are much more cognizant of the harm that will be done by subsidizing people , making them dependent on handouts, to say nothing of the disincentives they are creating for those taxed to continue producing at the same rate.

As a taxpayer, one has little real influence on how tax dollars are spent doing “good”.  On the other hand, if one doesn’t like the way a certain charity is spending the funds entrusted to them, it is very easy to stop supporting them.  They know this and, invariably, spend their funds as judiciously as possible.  If they don’t their reputation will be tarnished and contributions will dry up.  Private institutions more closely reflect the values of the community they serve.  Funds will be spent most wisely.  The only thing one can say about government programs is that they will spend lots and lots of money, with outsized portions on overhead.  Because of that one can be sure the government programs will be wasteful in the extreme when compared to a private sector provider.

Cycling back to Ms. Powers’ view, while we can see the “fruits” of government spending that doesn’t tell the whole story.  Five or six years ago the Congress was embarrassed into not funding the so-called “bridge to nowhere.”  This was a very expensive bridge to an island in Alaska that was home to a few hundred people (who had made the decision to live there knowing it didn’t have bridge.)  If the bridge had been built people would have admired the engineering prowess involved.  They wouldn’t have stopped to think about all the things that weren’t built which represent the true cost of the bridge.  Government officials loves to build things because they can put plaques with their names on it.  I believe the only plaque on any government building that isn’t dedicated to the members of our armed forces should read: paid for by the taxpayers.

In the final analysis the only reason to do something through government is that it can do it less expensively than the private sector. On this basis, government’s role in our lives would be reduced dramatically.  As it should, in my opinion.