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The debt ceiling
Jul. 31st, 2011 12:08 amHere are my thoughts on the debt ceiling negotiations. All comments welcome. Feel free to agree or disagree, to say that this post is interesting and insightful, or to complain that it is didactic and boring.
I start from the premise that the government is supposed to save us money by doing things in the public interest that it can do better and cheaper than private enterprise. I bet you agree that it doesn’t always do this. It is possible for the government to waste our money in at least three ways:
• When it does something not in the public interest. I place our military activities in Iraq and Afghanistan in this category. YMMV.
• When it does something that the private sector could do better. I can’t think of a major government program in this category. Your suggestions are welcome.
• When it fails to do something in the public interest and within the limits of its constitutional authority that it could do better and cheaper than the private sector. For example, all the evidence I have seen indicates that government health insurance is less expensive than private health insurance. Since 1969, the real cost of Medicare per beneficiary has risen by a factor of five. This is terrible, but the real cost of private health insurance has risen by a factor of eight. We would save buckets of money if public health insurance were available to everyone.
If I’m right so far, the general principles of what to do about the federal budget are clear. We should eliminate government programs that waste money. We should continue, expand, and create government programs that save us money. We should happily tax ourselves enough to pay for everything, because the government would be saving us money.
( Read more... )
Here is a mystery I don’t understand. I have emphasized that the government can, and often does, save us money. If I am right, why haven’t I heard anybody else saying this? Many voters want lower taxes and less government spending because they believe that the government wastes their money. Why don’t politicians explain to them that the government is at least trying to save them money?
I start from the premise that the government is supposed to save us money by doing things in the public interest that it can do better and cheaper than private enterprise. I bet you agree that it doesn’t always do this. It is possible for the government to waste our money in at least three ways:
• When it does something not in the public interest. I place our military activities in Iraq and Afghanistan in this category. YMMV.
• When it does something that the private sector could do better. I can’t think of a major government program in this category. Your suggestions are welcome.
• When it fails to do something in the public interest and within the limits of its constitutional authority that it could do better and cheaper than the private sector. For example, all the evidence I have seen indicates that government health insurance is less expensive than private health insurance. Since 1969, the real cost of Medicare per beneficiary has risen by a factor of five. This is terrible, but the real cost of private health insurance has risen by a factor of eight. We would save buckets of money if public health insurance were available to everyone.
If I’m right so far, the general principles of what to do about the federal budget are clear. We should eliminate government programs that waste money. We should continue, expand, and create government programs that save us money. We should happily tax ourselves enough to pay for everything, because the government would be saving us money.
( Read more... )
Here is a mystery I don’t understand. I have emphasized that the government can, and often does, save us money. If I am right, why haven’t I heard anybody else saying this? Many voters want lower taxes and less government spending because they believe that the government wastes their money. Why don’t politicians explain to them that the government is at least trying to save them money?
