Corcoran on Governmental Powers vs. Governmental Priorities

Kevin Corcoran, a regular reader, once again sent me an interesting premise for a blog post. Here is Kevin:

Senator Bernie Sanders once tweeted:

Say Bill Gates was actually paid $100 billion in taxes. We can end homelessness and provide safe drinking water to everyone in this country. Bill will still be a multi-millionaire. Our message: The billionaire class can’t have it all when so many have so little.

Advocates of government programs have a history of overoptimism about the costs of their initiatives. When Richard Hefner interviewed Milton Friedman in 1975, Friedman said, “John Kenneth Galbraith, in an essay he wrote The New York Times As the magazine section states, there is no problem in New York City that would not be solved if New York City’s current budget was doubled. Now, New York City’s budget has tripled since then. And all problems are worse.”

Let’s assume Senator Sanders is right: that for $100 billion in one-time spending, the federal government could not merely reduce or alleviate homelessness, but actually the end It’s straightforward, with the added bonus of clean drinking water for all.

But if so, there is an obvious question to answer: Why hasn’t the government already done so?

It is not that the government has received insufficient funds. In fiscal year 2022, the federal government will take in about $4.4 trillion in revenue and spend about $5.9 trillion. So, if Sanders is correct about the cost of ending homelessness, the federal government could completely end all homelessness in America with just 1.7% of what it already spends in a year. Accepting Senator Sanders’ claim would significantly strengthen Brian Kaplan’s argument that priorities, not power, best explain poor government performance.

I’m sure Senator Sanders would agree that the federal government has demonstrated terrible priorities in how it manages the vast resources at its disposal. I can think of several reasons for this terrible priority. Regulatory capture protects upstarts against the rich and well-established using government resources. Special interest groups and lobbyists exert significant influence over legislation. In general, the powerful favor the interests of the powerful, and the political process does little to improve this.

But for some reason, Bernie Sanders thinks that if he can get another $100 billion from Bill Gates, then The money will eventually be spent wisely to achieve worthy goals. But why? The same incentive structure that created the existing terrible government priorities hasn’t changed, so why would we think that the extra $100 billion would actually be put to better use? There is no reason that I can see.

If you believe that the political system has been hijacked by powerful special interests to benefit the rich and politically powerful [DRH note: although there is strong overlap, these are not the same] On the public, the last thing you should want is more resources funneled into that system, at least until those structural issues are resolved. If you have a rich friend who is struggling financially while spending extravagantly, the appropriate response is not to give him more money. Your priority should be making sure he gets his act together and uses his already abundant resources more responsibly.

So why is the senator so fixated on putting more resources into a system that he believes uses those resources so poorly? Lack of mind reading skills, I can only guess. But I suspect it’s at least partially related to the fact that “Raise taxes on the billionaire class!” It’s an easy applause line, especially among those who would vote Sanders into power. In contrast, imagine a politician who says “Look, there are serious structural problems affecting how the government is already using the taxes it’s already using, causing the money to be used in ways that are contrary to what we believe. Unfortunately, until those problems are fixed, nothing will be solved by bringing in more money: it will be put to the same bad use.” It will not excite a mob, or get people to the polls to tick his name on the ballot. The only thing going for it is true. But the currency of elected officials is not true; it is the line of applause for their base.

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