"Wasteful government spending" is one of America's favorite whipping boys. Wouldn't it be just dandy if we could eliminate most (or all) of it? Then we could balance the budget, cut taxes, pay down the debt, get government off our backs, reduce unemployment, reduce oil imports, cool the globe, eliminate obesity, shore up motherhood, and enjoy a lot more apple pie. Nirvana would be at hand, if only we could eliminate our nemesis: "wasteful government spending."
That's what our politicians apparently think we think, anyway. In short, they seem to think we're idiots.
I dislike waste as much as anyone else does. Whenever a baseball pitcher gives up a hit, every pitch thrown during that at-bat turns out to have been wasted. No doubt about it: all baseball pitchers are wasting their arms on a high percentage of their pitches.
Whenever a tennis player loses a game, every stroke in it was wasted; likewise, losing the set wastes every game in it, and losing the match wastes every set. Both winning and losing tennis players are wasting a large portion of their energy and talent, aren't they?
Tiger Woods has finished out of the money in a few tournaments now and then. Think of all those strokes he just plain wasted. Every year I've watched, the NFL team that wins the Super Bowl wastes several plays during the course of the game. I haven't been involved in a car accident in years, yet I keep paying money every month for car insurance; what a waste.
Think how much money and time Edison "wasted" on failed experiments during his search for a light-bulb filament. How much did Jonas Salk and his peers waste during their search for a polio vaccine? How much have you wasted on food you've bought that eventually got thrown out (stale bread, etc)?
The federal government is no exception when it comes to wasting things. Since 1944, how much federal spending on the GI Bill has been wasted on the small percentage of GIs who ended up not finishing college with the money they were allocated? How much money and time do weather satellites waste watching calm seas and balmy weather? How much Head Start money is wasted on the portion of kids who don't turn out to be productive citizens, let alone the next Newton, Einstein, or Mozart? How much Homeland Security money is wasted checking inbound containers carrying harmless goods? How much money is wasted on university research grants that don't yield an incremental step towards energy independence?
Sheesh, waste is everywhere! If only we could eliminate all of it. If only. That's the way shallow thinking works, anyway.
The problem with shallow thinking is that in most cases it's impractical or impossible to eliminate the waste, and in many other cases we shouldn't want to eliminate it. Why? Because much "waste" is inextricably built into a process that yields overall positive results.
Tiger Woods has wasted a lot of strokes, holes, and tournaments; so what? Roger Clemens wasted a lot of pitches; so what? Thomas Edison wasted a lot of materials and time on unsuccessful experiments, the NY Giants wasted several plays in the Super Bowl, Roger Federer has wasted a lot of points and games at Wimbledon, Jonas Salk wasted materials and time on unsuccessful anti-polio experiments, you and I have wasted money letting partial loaves of bread get stale or moldy, and Cheerios that don't make it into the kids' breakfast bowls get thrown into the trash every morning all over America.
But the question remains: So what?
Why is the much ballyhooed word "waste" getting so much more more attention than the good news that typically accompanies it? Woods, Clemens, Edison, Federer, Salk, and the NY Giants did some very good things for many of us, in spite of what they wasted. You and I fed our families quite well, thank you, in spite of the bread we allowed to get moldy. And kids all over America get a sufficient breakfast in spite of the Cheerios that hit the floor instead of the bowl.
And what about "government waste"? Here's my judgment: If Head Start allows one or more Einsteins, Newtons, or Mozarts to break out of the pack, Head Start is worth it in spite of the so-called waste. If the GI Bill continues to educate and transform generations of GIs returning to the private sector, the GI Bill is worth it in spite of the few who don't finish. If a weather satellite eventually spots a brewing hurricane in plenty of time to save hundreds or thousands of lives, it's worth it in spite of all the time it "wasted" beforehand, watching balmy weather. If Homeland Security detects a single dirty bomb hidden inside a shipping container, it's worth it in spite of the vast majority of benign containers it took time and money to check. If research grants to universities somewhere yield a breakthrough in non-fossil-fuel energy technology, it is worth it, in spite of the research grants that yielded unsuccessful experiments. If we had spent sufficient extra money on intelligence gathering and coordination to prevent 911, it would have been worth it in spite of the dent it would have put in America's political golden calf, the almighty surplus.
If (McCain's) proposed millions in government prize money offered for energy innovation someday yields a paradigm-shifting superbattery, it would be about as far from a "gimmick" as you can get – (Obama's) obligatory, election-year political rhetoric notwithstanding.
Conclusion
Spending so much time talking about government "waste" is a waste. We should expand government experimentation within its areas of accountability – which, according to Adam Smith, are (1) national security, (2) justice, (3) education, and (4) infrastructure, while maintaining (5) a stable currency. Borrowing money from willing lenders to get better at any or all of the first four is what those lenders are looking for, and it would therefore not undermine our creditworthiness (i.e., our ability to maintain a stable currency).
Don't get me wrong: waste that can be eliminated without any undesirable side effects should be eradicated without hesitation. But I'll add this: the wasted dollars we save should be matched one-for-one by tax cuts or by reinvestment in appropriate extra experimentation. That would leave borrowing unchanged, which would be perfectly acceptable, because eliminating waste increases the portion of spending that's productive. And, as we all (should) know, borrowing money for good investments is sound financial practice (…ask any banker).
Let's eliminate waste that we can isolate from productive spending. Let's cut taxes -- or increase productive spending -- by one dollar for every dollar of waste eliminated. And let's invest in experiments that might yield better security, more equal justice, the emergence of an extra bunch of Einsteins and Mozarts, and the incentives and technical infrastructure required to discover new paradigms in energy technology. Let's invest in the future, and trust ourselves to pull it off.
Let's give the positive, unpredictable surprise every chance to emerge. Let's stop worrying about government borrowing for that purpose, let's stop wasting time spewing hot air about waste (most of which would cost more to eliminate than to accept as a cost of progress), and let's stop propagating the falsehood that every wasted dollar was borrowed (instead of taxed) from the public. Let's spend and borrow as necessary to encourage the positive Black Swans and to prevent the negative ones. As the GI Bill demonstrated, one big success will more than pay for all the borrowing it took to fund the experimentation, as well as the "waste" that goes with progress.
We need a paradigm shift, and all such progress generates some degree of "waste." Why not focus on the former instead of the latter? Larry Kudlow correctly keeps reminding us of what Reagan used to say:
Okay, you showed me the manure. Now show me the pony.
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End note:
I think it was Descartes who apologized to a friend for a lengthy letter he wrote, saying that he just didn't have enough time to make it shorter. I know what he meant; I usually spend a lot of time trimming the number of words it takes to get the point across -- but this time I don't have the time. Maybe next time.
Excellent point, Steve. using that old saying: One person's concept of Govt waste is often another person's job.
I provide the following example as an example of perceptions of waste. The Dem strategy appears to be shift Federal spending from defense to infrastructure. Trading (perhaps more) low paying less technical jobs for (perhaps fewer) high tech higher paying jobs.
Posted by: Counter Revolutionary | 10 July 2008 at 06:34
Steve, I look forward to hearing you've increased your taxes voluntarily to pay for the great experimentation benefits that the government is giving us. :)
The difference missed in this post is whether the property was rightfully taken to begin with. I cannot (morally) rob Tiger Woods of his income so that I can "experiment" on his dime. But he can experiment with his own property however he sees fit.
That distinction is catastrophic to any economic argument in defense of government action.
Plus of course, no one needs to let government "experiment with socialism" or "price controls" or any other nonsense - which they will do if they get a chance. Government is staffed with people that tend to substitute force for thinking (they start with forcible taxation after all ...).
The "government should experiment" has proven fatal to every society where it's been tried. I should hope those empirical results will keep anyone highly skeptical of any pro-government claims ....
Posted by: JIMB | 11 July 2008 at 12:54
According to Gula, you are committing an informal fallacy, an argument whose stated premise fails to support the proposed conclusion. Of course there is waste in everything, but a certain percentage of Tiger Woods shots are great, whereas none of mine are. To support your conclusion, you have to show that government, irrespective of waste, produces superior results by some metric over another approach.
Also, you contradict yourself. Waste is ok when it comes to government spending but is not ok when it challenges your belief system, i.e., “let's stop wasting time spewing hot air about waste.” This is a subtle attempt at censorship.
Posted by: Higgs Boson | 11 July 2008 at 15:41
Government’s *duty* is to produce national security, justice, an educated population, certain types of infrastructure, and a stable currency. It has, by consent of the people, a monopoly on the “production” of those. The people assigned those to the government, so the question as to whether the people could do them better is irrelevant.
I want government to do a better job carrying out its duties, starting with national security, which (in my book, and many others’) includes independence from foreign oil.
My taxes will increase automatically as innovation and the growth it generates causes my income to increase -- without any increase in my tax rates, I might add. So I happily volunteer to pay any additional tax dollars that result from the application of an unchanged tax rate to whatever increase I get in my income. Unless, of course, all those extra tax dollars cause the ratio of debt/GDP to start dropping, in which case I advocate a tax rate cut in conjunction with increased borrowing as necessary to keep the debt/GDP ratio relatively constant.
Lastly, I’m in favor of eliminating waste that can be isolated. Wasted hot air is isolatable, and can therefore be eliminated with no downside. There is no contradiction.
Posted by: Optimist123 | 11 July 2008 at 17:30
Actually, as a constitutional republic, the duty of the government is to uphold the constitution. There is nothing in the constitution about educating people. If government truly operated by consent of the people, the war in Iraq would be over by now and our borders would be secure against illegal immigration. I doubt many people believe that government operates by consent of the people.
“Wasted hot air is isolatable, and can therefore be eliminated with no downside.” Yipes! I’m not sure if I get your drift, but it sounds like you want to isolate and eliminate ME. I take back everything I said. Government is good. I want more government.
Posted by: Higgs Boson | 11 July 2008 at 18:42
Now that I think about it, haven’t you made the perfect argument for eliminating the deficit? If government operates by consent of the people, and people believe the deficit is too high, then is it not the duty of the government to eliminate the deficit and balance the budget?
Posted by: Higgs Boson | 11 July 2008 at 20:29
Upholding the constitution would include defense, i.e., national security, equal application of the law (justice), and promoting the general welfare (under which education and infrastructure would be close to the top of the priority list).
Government (the republican form) operates by the consent of the people through their representatives. There's usually a time lag between "the people" changing their minds vs govt changing its actions, which is the nature of the republican form -- a good thing, according to Federalist #10 (by Madison), in part because it puts a damper on the tyranny of the majority.
To isolate false hot air in a free-speech society means (in my book) exposing it as false, for the purpose of encapsulating it to prevent it from contaminating serious mainstream debate. There will always be fringe crazies who subscribe to such things as "all waste can be eliminated", "the Fed is a secret conspiracy of fat cat bankers", and "911 was an inside job"; but their ideas belong in the same faraway corner as "flat earth", "blue cheese moon", and "the oil companies assassinated JFK" -- but they deserve a smaller audience.
National security and innovation are good. I want more of them, and the government has some responsibility for those.
Where in the constitution does it say the budget must be balanced, let alone define "balance"? I would, of course, settle for my own definition of "fiscal responsibility" -- the only specific definition of which I'm aware. See
http://tinyurl.com/ypawax
Posted by: Optimist123 | 12 July 2008 at 21:13
Steve, I like your blog and enjoy reading some of the good ideas you have here. I also like your approach - sticking to the evidence.
Perhaps we should agree to use that approach here. Where is the agreement between yourself and the government to provide these services and your signature for that agreement?
In addition, if there is consent, there's no need for force. Since government uses force against citizens to force payment for these services without any prior offer and acceptance of that offer, I submit to you by a matter of simple evidence that the government has no consent.
re: "Government’s *duty* is to produce national security, justice, an educated population, certain types of infrastructure, and a stable currency. It has, by consent of the people, a monopoly on the “production” of those. "
Posted by: JIMB | 18 July 2008 at 11:59
JIMB:
I'm a citizen, and we citizens have turned over certain powers to the government.
It's called a "social contract" -- and you can read about it here:
http://tinyurl.com/2kxphr
Our constitution begins with "We the people..."; our founding fathers understood the concept of the social contract, and laid out specifically which powers we the people were assigning to the federal government.
My signature wasn't required; my citizenship began at birth. I am happy with the social contract; but anyone who is not happy with it is free to renounce their citizenship. And anyone who would rather not renounce citizenship, but is unhappy with the social contract's terms is free to petition the government in an attempt to change the terms.
Defense, justice, education, infrastructure, and a stable currency: Government's duties. Most if not all other things: Not government's duties.
Posted by: Optimist123 | 21 July 2008 at 12:22
“And anyone … unhappy with the social contract's terms is free to petition the government in an attempt to change the terms.”
And there’s the rub: it doesn’t work. According to Gallup, Congress’ approval rating is 20%, a new low. People increasingly realize that Congress operates for the benefit of corporations and special interests but are powerless to do anything about it. Most people want a balanced budget. They want the war to end. Most do not see the need for 737 overseas military bases with more on the way. We do not want our phones tapped. I could go on and on.
Can you not see our point of view? We are horrified of a government that has grown out of control. A powerful elite runs the country according to its agenda, not ours, and extorts money from people by force in the form of taxes. Where is the “social contract” in that? JIMB is correct: it is a system based on force. The US has the highest per capita prison population of any country in the world. So many intrusive laws constrain and regulate our lives that we are all unindicted felons. Government can selectively prosecute those it wishes. The idealized fair and just government you describe is a phantasm that exists only in your head.
Posted by: Higgs Boson | 21 July 2008 at 19:53
Excuse me, where did I ever say I thought our government was fair and just? I do happen to think it is one of the least unfair and least unjust governments ever devised, but there's still a long way to go before, for example, equal justice and equal opportunity become reality.
It's easier to criticize than to create. Nonetheless, now that it's obvious you think the "social contract" is a sham, let's hear your proposed solution to our imperfect system... and not just your vision of the improved end state, but also your opinion of the proper path to get there from where we are today.
Posted by: Optimist123 | 22 July 2008 at 07:03
"According to Gallup, Congress’ approval rating is 20%, a new low."
So...Vote them out.
"People increasingly realize that Congress operates for the benefit of corporations and special interests but are powerless to do anything about it."
Oh really? Start a new party. Write your senator and congressman. Stop whining and take action.
"They want the war to end."
Which one? If you mean Iraq I suggest most people want it to end in victory. If the broader war on terror, well, you'll have to take that up with the terrorists.
"We do not want our phones tapped."
Is your phone tapped? Far as I know mine isn't and frankly I'm not worried if it is. That's because I don't use words like "Allah" and "jihad".
Posted by: Bob | 23 July 2008 at 09:50
I’m just expressing my opinion. I don’t enjoy arguing. I don’t want to argue with anyone.
As for the solution . . . sometimes there are no solutions -- only outcomes. I expect government to continue on as it has, accreting power, eroding personal freedoms, waging endless war. Social unrest will grow as the divide between rich and poor grows. Nothing you or I can do about it. All empires are swept into the dustbin of history eventually.
I cited Congress’ low approval rating precisely to show that we cannot, in fact, vote them out. The system is broken and corrupt. That’s why people are frustrated with government.
Posted by: Higgs Boson | 23 July 2008 at 12:34
Steve - Thanks for the response.
As a sceptical optimist, I'd have to disagree with the idea (lack of evidence) that there is a social contract.
http://en.wikipedia.org/wiki/Duress_%28contract_law%29
As a positive step, I encourage you (and Mr. Higgs) to join and contribute to www.campaignforliberty. I have done both. I believe rolling back the federal government is what we need - especially for my children (I don't know if you have any). Active people that restrain the growth of government and provide entrepreneurial solutions make this country great.
Thanks again for the blog, Steve.
Best wishes,
-- Jim.
Posted by: JIMB | 25 July 2008 at 09:39
in4mia: Do you prefer to hide behind internet anonymity?
JIMB: Thanks, but the mid-90s saw bipartisan support for the oversimplified mantra "reducing the size of government" -- the Republicans called for it repeatedly, and Clinton plus Dems at last obliged: national security spending was reduced to its lowest share of GDP since pre-WW2, again, with bipartisan support. ("National security" = intelligence + diplomacy + military force potential). Cutting back on all that helped us achieve the golden calf: the surplus. (For a few years, anyway.)
The smallest possible government is no government: anarchy. No social contract, as Rousseau and our founding fathers defined that term. There are some who advocate anarchy, but that faction does not include me. I'm with Adam Smith: government is for providing defense, justice, education, infrastructure, and a stable currency.
Posted by: Optimist123 | 25 July 2008 at 10:04
"The smallest possible government is no government: anarchy...There are some who advocate anarchy, but that faction does not include me.."
Gula, pg 59:
THE STRAW MAN When you take something your opponent has said,
exaggerate or distort it, and then attack what you have exaggerated or distorted, you have created a straw man.
Posted by: Higgs Boson | 25 July 2008 at 12:03
Steve "in4mia: Do you prefer to hide behind internet anonymity?"
Are you asking this because I use a nickname or because I only emailed you just now? If you were wondering why I haven't sent you an email until just now, we all only have 24 hours in a day and we have to prioritize our day. :-)
Posted by: inf4mia | 25 July 2008 at 20:18