Retirement and Social Security Reform
The Cost Of Government Incompetence: 50 Cents
On Dollar Down Rathole
Investor's Business Daily
June 26, 2007
By Ernest S. Christian and Gary A. Robbins
There is a certain biliousness about Washington
these days - and it is not just the sense of failure and frustration
about Iraq. The simple truth is that the bipartisan political
combine that has so long run things - Big Government Incorporated
- is in trouble. All it has to offer is a drastically overpriced,
outmoded product that doesn't work half the time.
There are no exciting big new ideas in Washington. Leaving
aside law enforcement and national security, there is not
much for big government to do these days - other than waste
money and cause mischief.
Congress long ago abdicated responsibility by putting 60%
of spending on automatic pilot headed upward and ultimately
for a crash - most notably Medicare, the prescription drug
entitlement and Social Security.
Now Congress is about to wave its wand over nearly $1 trillion
of additional "discretionary" spending that will,
among other things, perpetuate or increase funding for nearly
500 expenditure programs that are not even "moderately
effective," according to the Office of Management and
Budget. This includes more than 200 expenditure programs that
have failing grades of D or F.
By our calculations, the OMB study, called Program Assessment
Ratings Tool (PART), further reveals that on average more
than half of all federal expenditure programs are falling
about 50% short of their stated goals.
This means that out of every dollar spent, 50 cents may possibly
be accomplishing something worthwhile, but the remaining 50
cents might as well have been poured down a rat hole. In these
cases alone, the cost of government incompetence is over $250
billion per year.
Congress, however, is not the least bit interested in PART
or any other attempt to evaluate federal spending on an efficiency
or cost-benefit basis. For one thing, the results would be
embarrassing. Too many federal expenditure programs made no
sense to start with or are now outmoded and would be a waste
even if performed efficiently.
Furthermore, federal budgeting is not about spending as little
as possible and trying to make certain that each $1 spent
produces at least $1 of public benefit. Instead, it is about
spending the maximum amount in the most politically efficacious
The best new idea in Washington is a question: Is an ever
bigger federal government making the American people better
off or worse off?
With even higher taxes in the offing and a larger mountain
of low- and no-value government expenditures, there are good
reasons to think that big government is moving closer each
day to being a net negative. Most of the perpetrators in Washington
already know the unfortunate truth. No wonder they are uneasy
in the present and anxious about their futures.
It is not a choice between big government and no government.
Replacing the present efficiency-challenged behemoth with
a smaller, smarter, more efficient government does not mean
turning the clock back and sacrificing the positive contributions
that government should make in a prosperous and civilized
society. Just the opposite.
It is not necessary to bankrupt the economy with subsidies
for the well-off in order to assure that the needy among us
have health care, education and housing. Americans can better
do their jobs, educate their children and run their own lives
without Washington bureaucrats telling them what to do and
how to do it.
Businesses can better compete and win in the global economy
if they are not hamstrung by regulations that may have made
sense 50 years ago but no longer do. Taxes previously made
necessary by waste and inefficiency can be reduced. The economy
can grow more rapidly.
America can and will be a more generous and civil society.
As Benjamin Friedman pointed out in "The Moral Consequences
of Economic Growth," upward mobility through achievement
makes us better off and better.
Christian, an attorney, was a deputy assistant secretary
of treasury in the Ford administration. Robbins, an economist,
served at the Treasury Department in the Reagan administration.