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« Hagan on SOPA | Main | Deep pockets »

Jan 14, 2012


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That's good information. Thanks, Ed.

Two contradictory arguments are used against government programs.

One is that they are not efficient. The other is that they present unfair competition to private alternatives (see public option, death of).

There is nothing contradictory in those arguments, one facilitates the other. It is the unfair competition the results from limitless funding (see the Fed)that promotes inefficiency. Absent starvation inefficiency inevitably sets in.

And that inefficiency can manifest itself in different ways. The linked post, for example, which simply claims efficiency in government without providing a comparison to anything as proof focuses on a single measurement of efficiency. Efficiency is not a single measurement of, as in the case of the provided link, the cost to give away money. There is the question of who gets the money --- as far as the chart is concerned all the money could have been given to, not just the needy, but all Americans, and the chart's efficiency numbers would have remained the same. And then there are the inefficiencies at the other end where the funds are gathered via a highly inefficient and expensive tax code.


Frog, as a former fed, I can assure you that funding is not "limitless". You cannot call up the Fed and order a truckload of new bills to be printed for you.

Big, bureaucratic institutions often breed inefficiencies because the rewards available to individuals are not always in synch with the putative goals of that institution. That applies in the private sector as well as the public sector. The profit motive has not special or magic impact on efficiency when employees perceive no link between increased profits and their own welfare.

On the flip side, small, focused organizations are much more likely to be efficient, in either sector.

Because of the great number of people they must serve, many government organizations are large and bureaucratic and not optimally efficient. So are private organzations of similar scale.

Remember, too, that private for-profit corporations often slash service to unprofitable customers and call that efficiency. The government cannot do that. And should not.

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