Courtesy of wikipedia.org
During the 2024 election campaign, those scratching for a reason to support Donald Trump said they wanted someone with business experience who could make the government more efficient. Why they would hold that hope for a man who filed six bankruptcies is a mystery. Nonetheless, their folly makes this a good time to refresh our thoughts about why the government isn’t a business and shouldn’t be run like one.
Why A Government Isn’t a Business
A government’s aim isn’t to make a profit. Generally, it’s prohibited from keeping too much cash on hand. In Oregon, for example, if the state collects too much in taxes, it returns the excess to the citizens as a “kicker.” The federal government also has built-in limitations. One of them is a pay cap for employees—a far cry from Elon Musk’s bid of 50 billion dollars to head Tesla.
A government’s role is to collect taxes and redistribute the wealth according to need. In the case of federal taxes, seven states see the bulk of their payments go to poorer ones: Connecticut, California, Illinois, Massachusetts, New York, Minnesota, and New Jersey. States that receive more than they give are New Mexico and five southern entities.
The remaining money pays for services the government picks up because the private sector sees no profit in them. Think flood insurance, for example. Or, disaster response. Or, the Grid. (The Fifth Risk, by Michael Lewis, Thorndike Press, Large Print edition, 2018, pg. 71.)
Why Governments Aren’t Efficient
To complain that the government wastes money is to speak the truth. At the federal level, much of it is spent on research, the kind private money won’t touch. Where would Musk’s Space X be without federal subsidies? A big department money waster is The Advanced Research Projects Agency-Energy (ARPA-E). It spends revenue to find solutions to future problems like a pandemic, terrorist attack, or natural disaster. What private company would attempt to make a profit from thinking about an apocalypse that isn’t on the horizon?
Nonetheless, it’s apocalyptic research that brought us COVID-19 vaccines. Pharmaceutical companies were happy to manufacture the formula once the need arose.
The federal government throws away our money for several unprofitable reasons. Think land grants. Those dollars made it possible for the private sector to build railroads. Or, think Ronald Reagon’s “Star Wars.” When he proposed that idea, people laughed. No one is laughing today.
Not every project is a winner, but that’s the consequence of research. To be prepared for the next challenge, scientists and planners have to run up many blind alleys; But when an idea pays off, it pays off big! Think of Los Alamos and the splitting of the atom.
Even so, government spending doesn’t run wild as many think. Every year, the inspector general for each federal department issues a report on that agency’s inefficiencies. If taxpayers want to get a handle on spending, they should demand that copies of those reports be dusted off and the recommendations implemented. What’s inefficient is to create a new branch of government and allow Elon Musk and his cohort to muck around in areas beyond their expertise.
Should a government be run like a business? To answer the question think back to 9/11. When you saw police officers and firefighters climbing the burning Twin Towers to save lives, did you stop to wonder if their efforts might have been better served by an insurance company?
Foortnote: Boycott Tesla!
