Saturday, February 26, 2011

Public choice and the budget

Boyes pinpoints the obstacle to meaningful reform - whether fiscal, regulatory or scope/scale of government. The tenacles of public sector has spread throughout much of society.

Reason points to the recent appearance on Letterman by Rand Paul. This interview is indicative of two major components that will certainly block meaningful change (reduction) in the scale and scope of government in our life. First is the rent seeking behavior that is explicated in public choice thinking, the second the evolution in informal institutions that tend to support statist thinking.

As to rent seeking - a rational process that is facilitated in a participatory demoncracy by log rolling:

Anyway, here is the map of the vote (blue is a vote opposing ethanol, red a vote favoring ethanol), followed by a USDA map showing corn production and ethanol plants:






Back to the current Reason - Brian Doherty cites Tom Woods:

Rand explains, again correctly, that spending more money on education has not improved educational outcomes. Letterman's response? Well, education is important, so we've got to try something -- how about spending more money? But by the time of George W. Bush's term, per-pupil spending, adjusted for inflation, had already doubled since LBJ....

Letterman wonders why we can't just loot the "rich" some more. Well, if we'd like to make still more firms leave the U.S., that'd be a good start. Want to strangle the growth on which everyone's welfare depends? By all means pursue this strategy....

Rand points out, correctly, that the compensation package for Wisconsin teachers is extremely attractive, amounting to over $80K annually. Letterman, to general applause, says that figure should be doubled. Isn't education important? This is the level of reasoning people appear comfortable with.


Click here to view the Paul/Letterman exchange - illustrative of the challenge of confronting unexamined but deeply held belief with analysis and data.

http://www.youtube.com/watch?v=cB00uJMGIDk

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