Friday, September 16, 2011

Why we need a more limited government

One of my core beliefs and assumptions is that a good deal of the money that government spends is wasted or spent less efficiently than if the money were left in the private sector. Thus, more government spending only weakens the economy. By the same logic, less government spending would end up strengthening the economy.

The TSA is an excellent example of how government screws things up. Even its creator says it has turned into a monster. Read the whole thing: "TSA Creator Says Dismantle, Privatize the Agency:"

... a decade after the TSA was created following the September 11 attacks, the author of the legislation that established the massive agency grades its performance at “D-.”

“The whole program has been hijacked by bureaucrats,” said Rep. John Mica (R. -Fla.), chairman of the House Transportation Committee. 
Allowing airports to privatize screening was a key element of Mica’s legislation and a report released by the committee in June determined that privatizing those efforts would result in a 40% savings for taxpayers.
“We have thousands of workers trying to do their job. My concern is the bureaucracy we built,” Mica said.
“We are one of the only countries still using this model of security," Mica said, "other than Bulgaria, Romania, Poland, and I think, Libya."
HT: Tom Burger

UPDATE: Reader "Ian" notes an excellent article about how Canada and Sweden have shrunk the size of their governments meaningfully and successfully, and are probably the early leaders in a process that will sweep other countries in the years to come. Here are some choice quotes summarizing the thoughts of economist Vito Tanzi:

The state can’t survive without the market economy – but the market economy cannot survive the excesses of the state. One must yield to save the other. People once advocated government intervention to fix “market failure.” Now people primarily sense “political failure” and look elsewhere for solutions.
Government expanded as long as people perceived it as competent and benevolent. In this period, policy makers – “people who acted on behalf of the State” – were regarded, illusion though it was, as consistently faithful, wise and capable. These policy makers possessed “Solomon’s wisdom, Google’s knowledge and the honesty of saints,” Mr. Tanzi says.
The exit strategy for the state, Mr. Tanzi says, need not be all that difficult. The state, he says, now operates as a monopoly insurance company, insuring almost everyone against almost every risk. It does so inefficiently. Taken as a whole, the welfare state may now be considered delusional. Almost inevitably, it will end in bankruptcy.


Public Library said...

To limit the government you need to remove the Fed. Until you address this issue, the incentives are clearly skewed towards bigger government and larger stockpiles of debt.

Marshall Jung said...

A commenter on a different website where I read this y'day said that a politician complaining their program conceived for and run by the govt. had been "hijacked by bureaucrats" was the equivalent of handing your keys to the red vested guy at a fancy restaurant and then complaining that your car has been "hijacked by valets". What did Rep Mica expect was going to happen to a govt. run program?

Benjamin Cole said...

I am beginning to think not only the TSA, but absolutely the VA and even much of the Department of Defense should also be privatized.

And, of course, eliminate the USDA, HUD and Commerce.

Well, dreams are nice. Federal programs are not often sunsetted. But the GOP and Dems will stand athwart any real moves to privatize agencies. They use agencies to funnel money to the gaggle of grifters attached thereto, in their own districts or among their campaign contributors.

Ian Bruk said...

This might interest you

Ed R said...

Please recall airport security WAS formerly done by private companies. In the aftermath of 9/11 Bush etc. (elected as 'small government' conservatives and ultra-patriotic neocons) did not think employees of private companies could be made secure enough.

John said...

Business and government are two sides of the same coin. One can not exist without the other. Our politics is about which side of the coin lands on top.

Will business dominate the government as a plutocracy, or will government elected by the people restrain the excesses and corruption of business as Theodore Roosevelt did 100 years ago?

It's very clear which side the author of this blog and most of the those leaving comments are on.

Scott Grannis said...

Ian: excellent article, thanks

John said...


Your inference is that government is good and business is bad. I submit that both can be either.

IMO there is nothing wrong with reasonable regulation and oversight of the private sector by government. It is a matter of degree. Reasonable people should work together to make both serve the public responsibly, respecting private property and individual freedoms. Government should demand and expect ethical behavior from business, and exact swift and meaningful punishments for violators. Business should expect government to make fair and reasonable ground rules for doing business, and importantly, like a football referee showing no favoritism among competitors.

Greed and ambition exists in both business and government. In moderation, its not so bad. But when it gets out of control, changes need to be made. The free press and responsible, voting citizens are, IMO, invaluable for doing so.

John said...


I agree with everything you said. My inference refers to my perception of our predominant political debate between Republicans and Democrats. Republican rhetoric tends to "refutiate" and even demonize the role of government and Democrats want government to guard against the concentration of power into the hands wealthy plutarchs.

I think the debate, as framed, is symplistic and corporations are hand-in-glove with government and would go broke without government contracts. I work for a private company and we have both public and private sector clients. Draconian cuts in public funding would hurt our company.

Politicians need corporate contributions under our system. It's essentially a symbiotic relationship, yet the political rhetoric resembles a pitched battle between opposing forces.

Douglas said...

John (Unillustrated John) has hit the nail on the head. It is a mystery to me that conservatives have this idea, contrary to all history and evidence, that if you could just get rid of all government regulation and mandates, aka "interference", and taxation, and, no doubt unions, that the private sector will be warm and benign, and of course efficient and honest as the day is long. The private sector, freed of burdensome consumer protection will always make safe products, and the financial sector will always be careful and honest with everyone's money, so naturally the best idea is to privatize social security and pension plans... oh, wait, never mind that one...

Everyone, including Democrats, I suppose, knows that you have to keep an eye on government programs because (especially as long as private money controls electoral politics) there will be wide open chances for corruption, but that does not mean that government per se is hopelessly corrupt. The corruption generally comes in the form of some interest in the private sector gaining unfair advantage by buying one or a group of politicians.

I just don't get the idea that the private sector is pure and good while the government is corrupt and the source of all our problems. It's all just people...

Here's an interesting study showing it is cheaper for government employees to do work than to pay contractors to do it: