Monday, May 11, 2009

Government growth

Just about everybody is familiar with the saying "The only thing certain is death and taxes". Simple enough of a message but it is probably one of the earliest complaints about Government intrusiveness. Clearly, as long as there is a Government, it has to be paid for. However, there is a wide variation of opinion about the role of Government.

For a good period of time, the most widely held position was that Government is the least effective way to accomplish almost anything. It seemed that this belief started with Nixon and really picked up steam under Reagan. If you look at things like Charter schools, and privately run prisons, public private competitions for Government services and quite a few other areas, we have seen a great trend towards privatization. At least until recently.

Probably the biggest fallout of the financial crisis may be the reversal of this trend. Of course if you have lost your job, your house, your retirement, you may think they are more significant, and they are for you, but if we now go back into a cycle of bigger and bigger Government, it will indeed have very long reaching impacts.

I think this is an area I may dwell on for a while here, but there is one assumption that I would like folks to consider. Is private industry more efficient that Governement? Almost everyone immediately says it is, but time after time in public private competitions the Government has won. The losers of these competitions have usually complained that the Government had an unfair advantage based on the built in support infrastructure, but in most direct comparisions I have seen (and admittedly this is a small percent), Government was able to demonstrate they could deliver the services either cheaper or at the same cost and provide workers with better benefits.

More to come.

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