Why is it that cutting government spending is so hard to do? An analysis of systemic political incentives — as well as another look at the calculation problem — can give us the answer. FULL ARTICLE by Grant M. Nülle
Source link: http://archive.mises.org/13512/cutting-is-so-hard-to-do/
Cutting Is So Hard to Do
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Great article.
“Unlike the business manager of a private enterprise, bureaucrats and elected representatives have no means of rationally evaluating the value of any public service. This means that any cuts to that spending are intrinsically irrational — one simply lacks a reliable means of making a decision.”
In relation to this, and in conjunction with the first part of your article, I think it’s best to describe government decision making as political calculation, since economic calculation is impossible. You are right, it is unreliable. But I’m not sure it’s irrational . . . to the politician. To them, it’s just another kind of entrepreneurial activity, only in a very perverse manner.
The question the market entrepreneur asks is “how will this best serve consumers and thus increase my wealth?” The politicians’ question is “how will this best buy votes and thus increase my power?” There is a kind of sick reasoning there and a kind of antisocial calculation, but it works according to the logic of the interventionist system.
I liked that you mention the fact that political calculation is not necessarily irrational to the politician making a judgment call (what judgment call could be better than the one that “feeds” you the most?)
It chimes very well with Wilton Alston’s The Praxeology* of the Drug War: Who Knew?
This is exactly why we are heading full speed toward the cliff…..
Nice article. I love this line:
“Indeed, the grand bargain of democracy is this: every individual within the system — voluntarily or not — cedes the inviolable title to his or her property for the ability to elect, participate in, or marshal a political movement that competes for the privilege of seizing and spending everyone else’s money.”
The beauty is in the bluntness.
Cutting goverment spending is not so impossible, if whole nation accepts two simple rules:
1) you can not spend money you do not have, and
2) if you take a loan, you must pay it back.
Then if someone wants money, he has to claim he needs it more than everyone else. In general, everyone else does not like it very much. This makes it much easier to refuse this spending.
“We need to get rid of everyone in Congress!..Except well, uh..for my Senator”. – Typical US Voter.
The sick reality is that the longer they avoid making any cuts, the bigger the cuts will be when they realize they’re out of money to spend.
Exactly – everybody moans about how painful it would be now, just wait until 20, 50, 100 years from now. It is not too much to say that a collapse is coming someday.
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