Tuesday, August 2, 2016

The Only Program Government Knows How to Cut is Defense

I've been staring at my charts on usgovernmentspending.com for a while now. And now I can tell you what they say.

They say that government is a dab hand at wars. It can crank up defense spending into the stratosphere, cover the oceans with ships and the the sky with aluminum. It can rout out the Kaiser and the F├╝hrer.

And then it can unwind the whole thing and send the surviving kids back to college and work and wiving and thriving. Look at the chart below.
But do you know something about that chart? It shows us that government seems to be constitutionally unable to say: you know what, this government child-custodial facility thing just isn't doing the job. It was a good idea while it lasted, but now it is time to give the whole thing back to the private sector. For the children. We'll create a Teachers Veterans Administration (TVA!) to take care of the demobilized teachers, and treat their post traumatic stress disorder, but failure is failure, and we don't believe in reinforcing failure.

Yeah. That graf reads like utter folly. Who would dare to propose that we shut down the entire government education system? And yet, what good is it doing? It does a fair to middling job of educating the children of the middle class. That's because the middle class insists on it. But it is utterly failing to educate the children of the poor, and we know why. On the one hand, most people in the inner city think of education as a jobs program. And then schools are forbidden to discipline minority youths, because disparate impact.

The same applies to all the big government programs. Social Security? Imagine the economic growth if people were saving at Fidelity and Vanguard instead of sending money direct to grandpa, do not pass go. Medicare? Imagine the economic growth if middle-class women were saving for end-of-life care, and imagine the health care prices if grandma was bargain-hunting for health care the way that she bargain hunts for deals at Stein Mart.

And welfare? How about bullying the 1% to "give a little more" the way we presently suggest tax increases on the wealthy and Wall Street.

I know. This is all pie-in-the-sky until the whole system collapses and maybe not even then. Government is an armed minority occupying territory and taxing the inhabitants to reward its supporters with free stuff. It will be ever thus.

But the one thing government cannot do, is too afraid to do, is to cut spending when it runs out of money. Greece didn't have the balls to cut all the goodies to pensioners and university freeloaders. Venezuela has let the economy collapse rather than tell its supporters to hike it up and accept less free stuff from the state.

So I propose a new catchphrase for government. If you can't turn it off, don't turn it on. Don't start a program of new delicious free stuff unless you have the balls to turn it off when the nation can't afford it.

In fact, it is pretty obvious that the only thing that government can turn off is its war machine. Government is pretty good at ramping up spending for a war, and OK at paying for it without wrecking the economy. And it is pretty good at cutting spending to the bone when the war is over, provided it doesn't try to deflate to restore its inflated currency to the pre-war parity.

So I say that until government can show that it can cut spending on social programs as easily as it can cut defense, there should be no more social spending. This proposal is just common sense. Social spending is nice, and makes us feel that we are helping the poor. But there is one thing worse than not helping the poor, and that is going Greek or Venezuelan. When the poor are in danger of starving to death.

1 comment:

  1. Good article Chris, Health is the largest spending item. If you look at the $8-9,000 per capita spent annually, and consider how much of a doctor's or nurse's time that would pay for you get an amazing number of hours. If you consider increments of $100/hour you pay for 80 hours of time (adjust for $100/200/400 as you wish. Does a person see a doctor for an average of an hour per year per lifetime? This is way over-simplistic, but this sort of calculation based on a direct-pay model that eliminates expensive and time-wasting middle men and overregulation, with insurance and savings for appropriate events puts in the range of european care or maybe way less. At one time docs came to your home. Let's do a business model for that as an experiment.