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Fiscal Discipline for Progressive Causes

by: Jeremiah

Wed Dec 22, 2010 at 21:28:14 PM EST


by Jeremiah

In its most pure form, the nature of the debate between the Right and the Left is over what functions, or services, are necessary for government to carry out.  This post is not meant to rehash that ageless tug of war, especially since the nature of that discussion is often driven by a philosophical bent over the role of government.  Instead, this post is meant to get folks thinking about the operations of those functions that are performed by government.  

In framing this issue, I would ask folks on the Right to take a hiatus from their tiresome declarations of all Democrats being socialists.  And for my friends on the Left, I would ask that we discard with the idea that all spending is good spending, or the foolhardy approach that there are limitless resources from which to draw funding for worthwhile social programs.  In essence, I'd like people to focus on how government can do what it does- just better.

WE ARE THE GOVERNMENT
I prescribe to the idea that government is of and for the people.  It does not exist beyond us, it is us.  When there is inefficiency in government or a public program that hemorrhages money to little social good, it is basically like having a door open in the middle of winter while your heater blasts away to regulate the temperature.  Not only does it not make any sense, it drains resources that could be spent on other necessary expenses.  

We all have an interest in closing that door but we often stumble at whether or not there should be a door or not.  One side will say that the door should not exist in the first place.  The other side will say the door is absolutely necessary and must remain.  These often partisan debates, which I am not innocent in furthering and even enjoy, take our eyes off of the common sense first step.  We all live in this house.  It is, in fact, our house.  So, just close the damn door.

STEWARDS OF RESOURCES
There are limitations to our resources.  Obviously everyone knows this but it sometimes gets lost in the pursuit of the ideal.  I think what happens is that advocates of a certain issue get so wrapped up in the cause that they forget the larger picture.  Again, I am not innocent here and in the heat of the battle I have often had to check myself to make sure I am not hurting other causes I care about by pursuing the ideal on a single issue.  

Thinking of it another way, I am a proud environmentalist.  I believe that one needs to live reasonably with nature.  We are the stewards of our natural resources and must ensure that we pass down a healthy and viable ecosystem to subsequent generations.  Many progressives will completely agree with that statement yet when it comes to being a steward of our tax dollars, that dedication to conserve sometimes falls prey to the desire to push for more services and programs.  I think the full progressive agenda would benefit from the philosophy behind that stewardship approach.  Let's live with our fiscal realities in order to preserve services and programs.

SMARTER GOVERNMENT BENEFITS ALL
Government must be better.  The stereotype of government bureaucrats with mounds of unnecessary paperwork is unfortunately a reality in many ways.  Government should be operated with the efficiency of a business and where the profit motive of business can be appropriately controlled, government probably should cede program operations to business.  I don't say that because I am anti government, but because I want the public to receive maximum services with the resources available to us.  

I am not against certain levels of privatization as long as that privatization is well regulated, the public constantly surveyed of their opinions on the effectiveness of services, and vendors kept to task of well developed contracts.  To me, it is the provision, efficacy, and effectiveness of services that are important, not the mechanism by which those services are delivered.

It is a no brainer that fraud, waste, and ineffective spending should be addressed.  Yet, this low hanging fruit is often more difficult to pick than you would think.  We need better management of public programs; policymakers that are driven by a desire to have more effective government, not necessarily more government; and a public willing to hold public officials accountable for inappropriate expenditures or waste.

CONCLUSION
We the people are the government.  We must better manage our resources and realize that there are limitations to our resources.  Finally, we must maximize the resources that we do have available by demanding more efficient operations, using existing private sector resources where possible, and holding one another accountable for waste, fraud and ineffective spending.  

Jeremiah :: Fiscal Discipline for Progressive Causes
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waste, fraud and abuse (WFA) in government (4.00 / 1)
Don't think you'll get any arguments about running government as well as possible. We the people should constantly insist that those charged with doing so work diligently to drive out waste, fraud, and abuse (WFA) in government.

The thing is, we're already doing a pretty good job on that.

Bradford Plumer writes about that this week. His article provides some examples of where the federal gov't might do better but he also concludes:

Coburn told ABC, "I would tell you that there's hundreds of billions of dollars every year, that if the American taxpayer could go down through it, they'd say 'wipe this off, this off, this off ... we don't think any of this is important.'"

But there's no evidence that this is actually true--which explains why, when state legislatures have to make budget cuts, they always end up making agonizing decisions. Employees get laid off, patients get denied organ transplants, and prisoners get shoved into overcrowded auditoriums.

Believing that waste, fraud, and abuse are enough to eliminate the deficit is a nice fantasy, but it's still a fantasy.

Kevin Drum calls the typical tax-payer reaction to WFA as The Really Big Country Problem. It's really hard to get inefficient spending below 2%. In all really big country with a really big budget, that's always going to be a lot of money.

I'd venture to guess that barely any organization in human history has managed to reduce WFA below about 2%. If you earn $50,000 a year, that means waste of $1,000. Even careful households probably piss away that much each year. If you run a million-dollar small business, it means waste of $20,000 a year. Again: even a very miserly small business probably loses that much. It's just impossible to keep track of every expenditure, monitor every employee every minute of the day, or make sure you get the best price on every possible purchase.

Probably no one would argue too much about this because these numbers are human size. An average family blows a hundred bucks a month on dumb stuff? Sure. A business with half a dozen employees makes $20,000 worth of mistakes each year? Sure. But what about a federal government that spends upwards of $3 trillion per year? The same rate of WFA amounts to $50 billion or more. Or, using the usual budget window, $500 billion over ten years. That seems like an outlandish amount, but it's actually the same 2% as everyone else.

None of this is to say that we shouldn't fight this stuff. Families should, small businesses should, and the government should. Hell, Coburn's book might be a public service. But even if we do a rip-roaring job of fighting WFA and run the cleanest government in human history, any decent investigator will still probably be able to find at least 2% waste in the system. It seems like a huge amount, but it's largely a mirage based on people getting fooled by numbers too big for human comprehension. This happens a lot in modern society.



Coburn (4.00 / 1)
When people like Coburn complain about government waste, I think how long they've been there. He joined Congress in 1994. If there's so much government waste that is easily cut, why hasn't he done so? It's just part of the smoke and mirrors to distract the public while politicians like him make sure their croneys among the corporate class are able to plunder far greater sums from people.

When a man embarks upon a crime, he is morally guilty of any other crime which may spring from it. Sherlock Holmes.

[ Parent ]
corporate welfare (4.00 / 1)
That is another example of areas where government funds are wasted.  I am not opposed to pay go approaches in the legislative process as long as you go after the unnecessary expenditures for the super wealthy before you go after those providing services to the poor first.


[ Parent ]
Jeremiah (4.00 / 2)
At the risk of being seen as being argumentative when I'm trying to help be informative, I'd just like to point out there's many forms of "corporate welfare" that I think liberals can actually get behind. Not all of course, especially those that are provided and benefit wealthy corporations. But government programs that help provide seed money for business startups or tax incentives intended to attract a new employer so that local people can get jobs or business training grants to help train a workforce that leads to companies staying or hiring more people at higher wages. Other types of things that fall under corporate welfare would be investments in federal research dollars that eventually will benefit a pharmaceutical or information technology company.

Like government waste, a term like corporate welfare often is in the eye of the beholder. To the super wealthy, anything that benefits someone other than themselves is government waste while to some on the left -- and I'm not saying you in this case since we hadn't really discussed it -- anything that would benefit a business would be corporate welfare.



When a man embarks upon a crime, he is morally guilty of any other crime which may spring from it. Sherlock Holmes.


[ Parent ]
We may disagree but that is okay (0.00 / 0)
I am not sure how I feel about special tax incentives for businesses.  I don't know how big a role the government should play in creating winners and losers in the free market, especially if those services are not the kind that benefit society at large by providing some broad based service to the social good.

Obviously things are not black and white but generally speaking I do not feel comfortable in giving special tax breaks to for profit businesses.  If there is agreement that a tax rate is in excess of what is necessary for business to incubate then that is a problem in and of itself.


[ Parent ]
Jeremiah (0.00 / 0)
Ideal world you'd be absolutely right, but when West Virginia has to compete with other state's economic development offices that offer grants and incentives to lure businesses. Much as the "free market" sounds great in principal, even the reddest of states try to tip the scales in luring businesses with government incentives. We can't have West Virginia's economic development team go into those fights unilaterally disarmed. So the key for progressives is to make sure such incentives are tied in with workers benefiting as much as possible.


When a man embarks upon a crime, he is morally guilty of any other crime which may spring from it. Sherlock Holmes.

[ Parent ]
taxes (0.00 / 0)
I'd prefer investing in the fundamentals of an overall better economic climate.  By that I mean using state budget dollars to pay for modern infrastructure upgrades (see broadband post a few days ago); education; improvements to population health initiatives.  I'd also like to see taxes that hurt business growth (corporate net income, business franchise, and just the general complicated tax system in WV) continue to be modified through off sets via taxing the coal industry more in severance and with a new resource export tax.


[ Parent ]
confused (4.00 / 3)
I can't think of a major progressive cause I've advocated for recently that would not have saved us money.

Let's look back at a few:
- Repeal of DADT 'enforcing "Don't Ask, Don't Tell" has cost U.S.taxpayers up to more than a half a billion dollars since its inception in 1994.'
- DREAM Act -- $2.2 billion in deficit reduction over 10 years (PDF from CBO)
- Public option -- CBO: Public option could save $68 billion by 2020
- Act now to reduce green house gas emissions -- the longer we wait, the more expensive it is Delaying just two years will require twice the effort (written a year ago... sigh).
- Get out of Afghanistan and Iraq -- $12,000,000,000 per month spent by our military for war in those countries


Clem (4.00 / 1)
When "conservatives" talk about cutting government waste, they really mean making sure the poor go hungry, homeless or without heat because what benefit are the rich getting out of that so it's wasteful.

When a man embarks upon a crime, he is morally guilty of any other crime which may spring from it. Sherlock Holmes.

[ Parent ]
cutting waste (4.00 / 1)
Cutting waste and attacking fraud does not have to be about attacking the poor.  That is really one of the points I have failed to make.  Ensuring that government contractors like Haliburton are not selling us services that we already have or building port a johns for more than it cost to build a house is just one of many examples.

An area of inappropriate spending could be allowing millionaires to access programs like social security and the promise scholarship.

The point being, if we want to further progressive causes then we have to think of ways to pay for them.  There are ways, many times, to find that funding in the current system without screwing the poor.  We just have to step away from the traditional battle lines and approach the argument in a different way.


[ Parent ]
examples (0.00 / 0)
As an example I will point to the debate over essential benefits in the health care mandate.  The higher the level of benefits the higher the cost of premiums the less poor folks will be able to afford those premiums even with the federal subsidies.  

Another example would be the progressive push back against WV's Medicaid program, Mountain Health Choices.  Folks were in part upset because it ultimately meant less services for those that did not sign up for the Enhanced program.  The issue is that there are finite resources, even with the federal match, and by cutting back on the margins, the State has been able to keep the Medicaid program afloat amid very dire budgetary projections.

I don't disagree on the points you posted.


[ Parent ]
Mountain State Choices (4.00 / 1)
The reason people were upset with Mountain State Choices is that it cut services below what they were federally mandated to provide.  People had to opt in to the "enhanced" pool and the paperwork was very complicated for the population served.  People were placed in the lower benefit pool by default even though they didn't make that choice.

When people have crappy insurance, the insurance company makes more money.  When people got crappy Medicaid coverage in the non-enhanced pool through Mountain State Choices, the Medicaid program initially saved money.

However, it was a long-term bad financial choice because it decreased prevention services and medical care in non-emergency situations. People get sicker without insurance and then end up relying on Emergency Rooms, "charity care" through hospitals, and more expensive treatments that Medicaid and other insurance pays for.

When lots of progressives like myself and el Cabrero, as well as researchers at Georgetown University, tried to show this was a bad move for children, families and the bottom line, the response from the Manchin administration was we don't have enough money and need to be fiscally responsible.  

That's always the mantra when it comes to programs for the poor.  Not so much when it comes to programs for the wealthy.

In a good conversation everyone speaks.  In a great conversation some even listen.


[ Parent ]
your example supports Carnacki's point (4.00 / 1)
Your MHC example actually makes Carnacki's point pretty well.

It's when it comes to spending money for the disadvantaged that fiscal discipline is suddenly so popular.

The amount of money we're talking about to fully fund WV health care needs for an entire year is a few hours of war funding.

Right now insurance companies spend something like 15% of their funds on administrative expenses--that's money spent figuring out whether or not to provide care, not providing care. With single payer and universal coverage, much of that money would be freed up to go directly to providing services.

Also, with cradle-to-grave single-payer universal healthcare there's far more incentive to invest in preventative care, thus reducing the long-term cost of care.

There's a reason why we pay more to get less from the US healthcare market compared to so many other industrialized countries. We have a really inefficient system with the insurance companies sitting between us and our providers.


[ Parent ]
from the clouds to the weeds (0.00 / 0)
That first sentence is part of my point.  I agree with you that this big picture guns vs butter question should be geared more toward butter.  I sincerely think that the wealthy should pay a larger share of their income than they currently do to provide for the public good.  Those questions however should be taken independently of operational questions like the efficiency or effectiveness of a specific program or service.  We almost get so distracted by the larger ideological questions that we lose touch with the nuts and bolts of specific program level issues.

MHC may have had a flawed implementation but the philosophy behind it was basically calling for people to come in and receive a health assessment upon which they would choose whether or not they wanted more services or basic services.  If they took more services they would have to sign a contract that they would follow through with certain, very basic, personal responsibility requirements.  This is something that a program like PEIA is also implementing right now via its wellness assessment program.  The private sector is also implementing these types of initiatives in the self insured market.  The ultimate thinking would be that we need to get folks healthier and people need to have some degree of personal responsibility for their health.  If we want to be able to afford health care in the US we are all going to have to go down this path.


[ Parent ]
I didn't know we on the left thought this. (4.00 / 2)
I thought it was a R talking point.

Like What?


Cutting waste requires a committment to gov't (4.00 / 3)
The GOP always says that they want to cut waste, but I argue that they are not capable of it because they don't believe in gov't.

GOP presidents/governors appoint people to run agencies that don't believe in their mission, that don't believe gov't can be a force for positive change. Their anti-gov't philosophy is, as Reagan put it, "gov't is the problem."

With that mindset, I argue, that they are incapable of seeking out waste and improving the efficiency of gov't. They'd rather put it all on the chopping block and privatize/sub-contract everything.

Most Dems fundamentally believe that gov't can make a positive difference and, therefore, care about making gov't run well.

Some examples: Clinton/Gore had their "reinventing gov't" programs that helped a great deatl. Obama has saved tens of billions just by reforming all of the private contractors arrangements Bush made. He has also found lots of savings in the Pentagon cleaning up sub-contractors again. Manchin commissioned an audit of PEIA and found thousands of people getting gov't healthcare that aren't suppossed too. Boring stuff, but key to making gov't work better and save money.

Progressives should embrace cutting waste, in a smart targeted way. It would help us reform our "big gov't" image with the public and free up money to spend on programs we care about.


great post (0.00 / 0)
and not just because i agree.

[ Parent ]
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