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Sunday, May 13, 2007

Uncle Sam Needs You

Have you noticed how skinny and weak Uncle Sam looks lately? Ezra Klein says it's time to feed the poor guy so he can do his job:

Give bigger government a chance, by Ezra Klein, Commentary, LA Times: On April 2, this newspaper reported that the Los Angeles Police Department had asked Philip Morris USA for a $50,000 donation to help fund its investigation into counterfeit cigarettes...

[W]hy shouldn't ... police ... have corporate sponsors ... (you know, aside from the obvious reasons of favoritism, bias and perverse incentives)? For that matter, what's wrong with ... families ... holding constant fundraisers to pay for the unfunded needs of their local public schools — drama societies and marching bands and that sort of thing? Or with parents having to go out and purchase body armor ... so that their sons are protected in Iraq? What's so odd about the crown jewel of the University of California graduate system, Boalt Hall Law School, having to move toward "privatization" so that it can raise more money and better compete with its private counterparts in an era when state funding has dried up?

What's so wrong, in other words, with hollowing out the public sector and replacing it with a pay-as-you-go society? It is the natural endpoint, after all, of the privatization craze, of the gospel of tax cuts and of the smaller-government-is-better- government mentality that has been on the ascendancy in the U.S. for nearly 25 years. ...

How has this come to pass? ... Conservatives talk a lot about government failure, but over the last few years, it's really we who have failed government, depriving it of the revenue, the conscientious management and the attention needed for it to succeed. Undercapitalize a pizza joint and your customers will taste the poor ingredients, become frustrated by the long waits and grow repulsed by the grimy environs. Staff it with your unmotivated drinking buddies and the service will falter, as will the quality of the product. It's no way to run a pizza place, and it's certainly no way to run a government.

But that's exactly what we've done. With ... the ... tax revolt, and with presidents whose entire domestic programs amounted to mindless tax-cutting, and with Congresses that have been happy to pass cuts and stack deficits, we have systematically deprived the government of the revenues it needs to provide basic services, even as we've come to need it to do so much more. ...

All that money has to come from somewhere. And the "where" isn't the high-profile initiatives that the media is watching — the Medicares and Social Securities (although they may suffer too) — but from the smaller, less-noticed, but critically important programs and departments that millions rely on.

If ... states cannot pick up the slack, there will have to be cuts in funding for police and schools and jails and Pell Grants and the Food and Drug Administration and the National Institutes of Health and the Department of Veterans Affairs and the nation's infrastructure and all the rest. ... And that it's all happening even as the globalizing economy demands ever higher skills, as ill and traumatized Iraq war veterans are going without care, as roads and schools are crumbling and myriad other minor catastrophes are underway beneath the notice of the national media but well within the range where they harm ordinary Americans.

Such unhappy outcomes are not merely morally unsettling, they're often economically inefficient. Government spending can be ... necessary... It can step in, for instance, when the market fails to deliver public goods that society desires but private entities haven't figured out how to fund. (It's useful having a national military, right?) And it can use its regulatory power to ensure that competition works to increase well-being rather than to simply amp up industry profits.

UC Berkeley economist Brad DeLong once wrote that "sometimes government failures are greater than the market failures for which they purport to compensate. Sometimes they are not." The trick is knowing which is which. But if, like the Bush administration, you are blithely unconcerned with running an efficient, effective government, ..., you never need make those judgments as you have neither the resources nor the personnel to effectively deploy the central organizing structure of modern societies. And that's a shame.

Libertarian humorist P.J. O'Rourke likes to say that "Republicans are the party that says government doesn't work, and then they get elected and prove it." Over the last few years, that's been true. But government can work, and increasingly, Americans appear to be anticipating its return. A new Pew Research Center poll finds that public support for a societal safety net and for government protections is at its highest levels in more than a decade — which suggests that Americans don't think bake sales are the way to fund their schools or that Philip Morris is really who they want subsidizing law enforcement. ...

When asked what type of political system Americans would have, Ben Franklin famously responded, "A republic, if you can keep it." Well, he also bequeathed us a government, if we can run it. And somehow, I don't think the Philip Morris police department is quite what he had in mind.

    Posted by on Sunday, May 13, 2007 at 12:06 AM in Economics, Politics, Taxes | Permalink  TrackBack (0)  Comments (19)

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