"Real liberty is neither found in despotism or the extremes of democracy, but in moderate governments.
Alexander Hamilton

Saturday, April 15, 2017

The value of government

( The following is an editorial form this weeks Granite State News

The value of government

 Our nation and state are struggling to answer the question, what do we want government to do for us?
 Right now we expect government at all levels to do two things: 1) serve as a referee, setting and enforcing rules to protect us from the antisocial members within and potential predators without; and 2) to provide services that most of us as individuals could not afford to provide for ourselves. We think that most Americans accept and expect government to play these roles. After all, any game worth playing needs both rules and a referee, and that is especially true with capitalism, which encourages intense competition where all players seek to take advantage of the weaknesses of their competitors. Inevitably for some players, the process of seeking advantage crosses lines and creates unfair and even predatory situations. Someone is needed to catch that cheating and blow the whistle on them. The recent housing bubble and subsequent Great Recession of 2007-2008 is the most recent example of seeking advantage to excess. Millions of Americans lost their jobs and homes and real estate values are still below where they were 10 years ago because short-sighted reckless behavior went unchecked. Despite disasters like that, there are many who argue government regulations in general stifle economic growth. There is some merit in this argument. The process of regulating activities can go well beyond the 80-20 rule, where 80 percent of results are achieved by 20 percent of the effort and where achieving the last 20 percent of a goal costs 80 percent of the effort: this is also known as the law of diminishing returns.
The regulatory process can also be abused to protect monopolies by tailoring minimum requirements to match those already dominant in a market in order to raise costs for new players attempting to enter the market. Unfortunately today we see politicians and those who stand to gain or protect competitive advantages using these arguments to do away with all regulation, good and bad.
Arbitrary rules like getting rid of two existing regulations if you want to add a new one – as our president and governor have proposed – is an open invitation to abuse. The last thing we need now is to allow a thousand Bernie Madoffs to bloom. Those who believe specific regulations are unnecessarily restrictive or unfair should subject them to formal public debate and not allow changes to be made in the back rooms in Washington and Concord.

However, it is the second purpose of government that we are most concerned about, and that is providing services that most Americans could not afford on their own. That includes obvious services – like plowing and maintaining the public roads everyone uses, and providing police and fire protection – as well as services and resources used at any one time by only part of the population – such as public schools, libraries, recreational activities, social services and healthcare.

Locally we have heard criticism from some of towns supporting non-profit services such as visiting nurses, food pantries, addiction treatment centers, and meals for seniors and the poor. The critics assert that residents who want to support these organizations can make individual donations instead – as if individuals are not already doing that and cutting the pennies on the tax rate was worth paying the dollars that would have to be spent if these services were stopped. The current federal budget proposal calls for steep reductions to or elimination of programs that partially support not only these local non-profits, but also schools, libraries, museums, national parks and public radio and television in favor of increased military spending and tax cuts.

On the horizon are plans to reduce or eliminate Medicare and Social Security benefits to “curb the growth of entitlements” in favor of cutting taxes further. This attack on the services provided by government not only reduces the value of government to most of us, it is penny wise and dollar foolish. Take Medicare as an example. The Kaiser Family Foundation has found that “administrative costs in Medicare are only about 2 percent of operating expenditures;” that compares with private insurance rates of 20 to 30 percent, and Medicare does not have to generate profit for shareholders. We certainly agree with the idea of putting America First. We just don’t see how cutting good regulations and dropping services that benefit most Americans cost-effectively in favor of being the world’s policeman is putting us first.

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