Category: Subsidies

  • On Welfare State, compassion aside

    There was a fine post on this fair blog about compassion, pity and the welfare state. I though I would add my 2 grams of silver and share a few thoughts.

    Outside a narrow circle of non-bleeding heart libertarians or, as I like to call them, actual libertarians, there is about zero support of completely removing welfare. The people on the left generally want more of it, and the people on the right just want somewhat less of it and “more efficiency”. Neither of these options will work in the long term, in the opinion of this heartless libertarian who just hates the damn children.

    The Universal Basic Income is, for example, one of the more prominent recent attempts to fix welfare, one that even some libertarians support. The idea is no welfare is not an option, so let’s have the best system. Sadly, I do not believe a best system, even if it existed in theory, can exist in practice. Why? This is what I will try to cover.

    They just want what is best for you, really...
    Kind, compassionate people

    The essence of the question is found in the essence of government. Government is at its core a concentration of power. This, naturally, now and always, attracts people who want power. So in the end, the ultimate goal for many at the top of government will be to get and retain power. Sure, they may have other ideas about society and maybe even be honest about wanting to improve it (at the point of a gun if necessary) and thinking they have the capability to do so (ignoring a few broken eggs here and there). But this is always secondary, at least for the ones who get to the top.

    In my view, in a struggle between those who want power to use it for, let’s say for lack of a better word, “good” and those who want power for the sake of power, the latter will come on top. What has this got to do with welfare? Well, any government activity will be inevitably used as a tool to get power, and will not be shaped to maximize results but to keep people in power. Welfare is no different. You will never get the welfare that is most efficient and helps the poor; you will get the one that helps politicians.

    Now, there are moments when feelings get the best of reason, and I think it would be acceptable to have a limited welfare system for the truly needy. This is a view of many right wing people I know. This will not work because there is not choice between limited welfare just for truly needy and a massive and much abused inefficient system. The choice is between no welfare and a massive and abused inefficient system. A limited system will never stay limited because, in essence, any program that allows politicians to transfer money from one person to another will be used to buy votes. More and more needy will be found. More and more people will receive something. And the limited help will be declared insufficient.

    Honesty is the best policy... exept in politics
    Telling it how it is

    It was always strange to me how people who support a social democracy scream about the evils of campaign money as “buying votes” while their political platform is literally buying votes. If someone gets money from the government, when a politician says, “I will increase these payment,” that someone will, quite literally, hear vote for me and I give you money. A welfare state is practically a license for a politician to buy power with other people’s money. And if I am wrong, I would love to hear a reasonable, logical argument as to how I am wrong.

    But there is a second layer. The large amounts of people not on welfare but who emotionally support the programs, either out of a misguided view on compassion or basic signaling of their moral high ground. So this is another group who will be convinced to give their votes because welfare is insufficient. I have seen multiple articles in the press where such people tried to live on welfare money to prove it can’t be done, and the conclusion was it can but it is not easy. So even when there is a level of welfare that many view as quite enough, others want more of it.

    One should keep in mind that the cost of welfare is not just the money that ends up at welfare recipients. Welfare also keep politicians in power, which means lots of money spent on various graft, not directly related to the welfare, but related to the politicians. Another point is that there will be an ever-growing bureaucracy dedicated to administering welfare, which may end up costing more than the welfare itself. There is also the cost associated with people who may be able to do something productive and do not, both due to incentives of welfare and to the economy in general, which is affected by the taxes needed to fund all the above costs.

    On the other side of the spectrum, other politicians will use it as a tool for their base, talking about scroungers and welfare frauds. But this will basically lead to another layer of division between people which is exactly what the politicians want. Divide et Impera is what keeps the big parties in power. There always need to be another side which is bad, and my side which is less so.

    The art of politics is basically to keep the people split on as many issues, so that they do not notice that no issue is handled properly. Must spread attention as thinly as possible to keep scrutiny off what the government actually does.

    Universal Basic Income will be no different. It will not stay for long as the only program, as different programs for different groups will be invented. It will constantly be under pressure to increase. And it will create an ultimate feeling of entitlement. You get money for breathing, basically.

    So to me the alternative is no welfare or a system which will inevitably become first and foremost a tool for power, with all other functions secondary. If no welfare is not an option,  I will accept a constant struggle will be on this and just stay out of it and leave it to others. I assume the system will oscillate, going too far then followed by a snap-back and then too far again. But to those who think welfare will be mostly about helping people as well as possible, I have a bridge to sell.

  • Nothing. Left. to. Cut.

     

    I have this ongoing conversation with the wife. She works for the federal government here in Canuckistan, and I’ve worked on a few government contracts over the years. I walk the delicate line of telling her that, while I respect what she does, there’s no reason that the government should do it. Which is not to say that it should not be done, just that it could be done through other means.

    At least it wasn’t unintentionally left blank…

    I’ve posited that you could cut the size of the federal government here by 60% and hardly anyone would notice. How would I do it? First, cut the 20% of programs that no one will miss. I’ve worked on some of these projects in the past. On one, I was working on a public-facing website to provide data ostensibly for “the public good”, at a cost of millions of dollars. One day, one of my colleagues got the idea to pull the website statistics to see how often and from where it was being accessed. Turns out, in the previous year, it had been accessed exactly twice from IP addresses outside of the department. Hardly anyone would miss that program.

    Second, I’m sure that there’s 20% savings to be found by cutting bureaucratic overhead. When the wife tells me about her day, most of it relates to how she’s working against the bureaucracy to try to get her job done. In my small consulting business, I’ve increasingly moved away from doing federal government contracts – the overhead is just too much. It’s much cheaper and faster to find and perform work for private clients.

    Third, I’d cut 20% of the people. If you look around your own workplace, you can identify a certain percentage of people who don’t pull their weight, or worse, contribute negatively. You know, the ones who are constantly at cross-purposes with the rest of the team, or the ones who spend all of their time commenting on Glibertarians.com, or the ones who just aren’t good at their jobs. I once led a team on which I didn’t have the authority to hire and fire (yeah, it sucked). I spent inordinate amounts of time trying to get contributions from non-performers. Then, one day, I just stopped. I ignored them. And, you know what? Our productivity went up. Strange, that. It happens everywhere, but the existence of public-sector unions exacerbates this situation.

    I wouldn’t do it all at once. I’d do it gradually, say over 12 years. I think that doing it more gradually would lessen the degree to which people would notice it (which is, hardly at all).

    Anyhoo, in the case of the U.S. federal government, I came across this neat-o website that breaks down U.S. federal government spending (I’m actually shocked that it’s a .gov website because it’s pretty well done). According to it, the U.S. government spent $3.85 trillion last year. I started looking at it like a minarchist softball coach, and here’s what I came up with:

    Social Security: $916.1B (23.0%) – CUT

    National Defense: $595.3B (14.9%) – CUT to $584.6B
    I opted to keep national defense spending, except for “Defense-related activities”, which sounds an awful lot like a slush fund for defense contractors. If you eliminate foreign interventions and limit spending to national defense, this number should be much lower. Since I’m not getting that fine-grained in this analysis, let’s leave it for now.

    Medicare: $594.5B (14.9%) – CUT

    Income Security: $514.7B (12.9%) – CUT to $144.8B
    Here, I’ve eliminated everything except federal employee retirement and disability. If you’ve already made those commitments to your employees, then you’ve got to keep them.

    Health: $511.3B (12.8%) – CUT

    Net Interest: $240.7B (6.0%) – KEEP
    You gotta pay the bank. Although there’s something to be said for the government skipping out on loan repayments and tanking their credit rating so that they can’t borrow any more. Picture your favorite congresscritter walking into a pawn shop or payday loans joint.

    Veterans Benefits and Services: $174.5B (4.4%) – CUT to $167.2B (4.2%)
    Here, I cut “Other veterans benefits and services”, because it sounds like more government cheese for contractors. In general, I think that you should look after military vets, to the extent that they can be injured during their service, but I’m sure that there’s more here to cut. For example, the largest slice of this category is $86.8B for “Income security for veterans”; most of the veterans I know are eminently employable.

    Education, Training, Employment, and Social Services: $108.1B (2.7%) – CUT

    Transportation: $92.9B (2.3%) – CUT

    Administration of Justice: $57.1B (1.4%) – CUT to $52.1B
    This is one of the fundamental roles of government, although if you end the war on drugs, I’m sure you could cut a bunch here, too. I did cut $5.0B for “Criminal justice assistance”, which is described as transfers to state and local governments for something or other.

    International Affairs: $45.3B (3.5%) – CUT to $13.9B
    Here, I’ve cut out everything except “Conduct of foreign affairs”. The rest looks like cash that will end up in the pockets of the Mugabes of the world.

    Natural Resources and Environment: $37.8B (1.0%) – CUT to $26.6B
    Honestly, I don’t know what most of this actually is. Maybe it’s within the domain of government, and maybe not. But “Other natural resources” (slush fund) and “Recreational resources” sure aren’t.

    General Science, Space, and Technology: $30.2B (0.8%) – CUT

    Community and Regional Development: $21.2B (0.5%) – CUT

    Agriculture: $20.1B (0.5%) – CUT

    General Government: $18.6B (0.5%) – CUT to $11.9B
    Here, I’ve cut “General purpose fiscal assistance” and “Other general government” as slush funds.

    Energy: $3.7B (0.1%) – CUT to $0.2B
    Here, I’ve cut everything except “Emergency energy preparedness”.

     

    So, let’s add everything up here. Let’s see … carry the 1 … Sweet Feathery Jesus, it’s worse than I thought. We’re down to $1.28 trillion, or to about 33% of the current budget. And, I’m fully aware that there’s still lots of waste in there.

    Earlier, I stated that most people wouldn’t notice if you cut the government by that much. Sure, some of the things that I’ve cut here would be noticed by people, but this is analysis is really only about cutting program spending, not eliminating bureaucracy and ineffective people. You know what people would notice? More money in their pockets. You’re welcome! I’m sure your rebate checks are already in the mail.