April 20, 2009

Op-Ed Contributor - Small-Town Big Spending - NYTimes.com

Tom Brokaw - Small-Town Big Spending - NYTimes.com

Brokaw recommends revamping the structure of legacy institutions such as towns, counties, colleges, etc., as the economy 'resets' (GE CEO Immelt's words) so as to improve efficiency and reduce costs.

I'm inclined to agree that fundamental changes, particularly in government, are needed. But immediately I'm brought up short by the reality that there is no way to absorb all the jobs that would disappear from these tax-supported employers if the change happened quickly.

On further reflection, we have built ourselves into a box with ever higher taxes to support ever more 'needs' and more government employees to manage the programs to meet those needs. Well-meaning politicians want to meet these 'needs' of the people which creates increasing dependency on government by these needy people. This dependency is then fostered and leveraged by 'advocates' to persuade politicians to increase, never to reduce, the programs. This translates into yet more spending and taxes.

Now comes the recession and the wailing increases. The wailers include both those that cannot afford to lose the services they have and from taxpayers (40% of people pay no income taxes and many receive tax credits) who are no longer willing to pay (or burden their grandchildren with) increasing taxes when they see their own private sector jobs at risk in a failing economy.

While Brokaw's idea has intellectual merit, the forces arrayed against such fundamental local and regional change are enormous because the people in these public sector jobs much prefer the less risky nature of their livelihood. Such changes can happen, but only incrementally over a generation or two.

So where do we go from here? The answer is clearly a far healthier economy with motivated people doing useful work that will gradually improve our condition. Meanwhile, plans should be afoot to reduce the size of government. If you believe that's on the near term horizon, there's a bridge in NYC you may want to buy.
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