Consider Medicare. Under Parts A and B, the government pays doctors and hospitals a set fee for
each service provided. That encourages them to deliver unnecessary services because they make more money the more services they bill. As an example, investigations have found that doctors are ordering many unneeded drug tests for seniors.
I think that someone with an opposing viewpoint would say that even though government initiatives are not executed flawlessly and that adverse side effects do occur, the intentions of the programs are good and the positive outcomes are sufficient to outweigh the problems. As Edwards puts it,
It is true, however, that just because a federal policy creates unintended collateral damage does not automatically mean that the overall policy is a failure. Some federal interventions do generate higher benefits than costs. The important thing is that policymakers look beyond the intended effects of their programs and consider how people and businesses may respond in negative ways over the longer term.
As I see it, those of us who are concerned about government failure have to get over the following hurdles with those who disagree.
1. Lead them to think beyond the intention heuristic. “Support for education” sounds good, but that does not automatically justify every government program intended to improve education.
2. Scrutinize the actual design and execution of government programs, rather than assume that both are flawless.
3. Track the cost of government programs. This includes the direct cost paid by taxes, but it also includes the indirect cost of market distortions, including (as Edwards points out) the deadweight loss from taxation.
4. Take into account the organizational dynamics of government programs. That is, agencies and programs tend to persist well beyond the point where they have served a useful purpose.
5. Take into account the public choice aspect of government programs.
Even so, I still do not think that we will get very far. I think that the supporters of Obamacare are aware to some extent of the way that each of these issues has affected the program (perhaps not so much with issue 3). And yet they are very enthusiastic about Obamacare, and they insist that it is working.
I think a much more substantial hurdle that is related to, but distinct from, the ones you’ve outlined is the ‘tweak-ability’ heuristic, which dismisses any potential criticism as trivial because easily remediable in principle – which is pretty much the opposite of the point Mises tried to make in A Critique of Interventionism.
If I discuss any kind of problem with a government program with a typical educated progressive, they say:
But the Catch-22 is that if, on the other hand, one’s line of criticism emphasizes that some particular cost is both major and fundamentally irremediable due to the inherent features of the problem and unavoidable features of political-bureaucratic dynamics, then these arguments are so abstract and generally-applicable that it throws the whole social-welfare-state progressive enterprise and agenda into question, which is so important that the immediate psychological reaction is simply a form of ‘crimestop’ and immediate rejection of the argument.
Bottom Line: The problem is the belief: “All programs are fixable, and since they are fixable, all criticisms of any program per se have no real or compelling significance and can be dismissed as trivial.” Fighting that attitude seems an almost insurmountable challenge.
Economic way of thinking is very complex and fraught with unknowns. Economists already know this, at least some of them. But this incomplete information set gives a lot of scope for employment of biases.
Even if someone gets “beyond the intention heuristic”, the usual outcome is not to correct the overall methods but to go even more down the same path. I think that might explain political polarization.
In general, it takes a lot of intellectual effort to overcome the innate instincts which support some sort of planning and enforcement of a predetermined pattern on society.
For way too many individuals, markets represent uncertainty. Of course, this is not applicable to natural rights libertarians, for them the consequences do not matter anyway.
# 1 should be: Why is this to be undertaken through the mechanisms of government(s) and thus subject to considerations of political (electoral) effects? Are there absolutely no other alternative means of “private” forms of cooperation (even those that would require adjustments of other governmental actions) for seeking the sane ends?
The military is the best organized and most effective of all segments of governments; yet, all “programs” are not assigned to the military. Why do we always start with the government as the course for actions?
Yes, in the end it won’t get far because in the end everything is public choice. Nothing is fixed and there are no final solutions but everything must adapt, so the focus must be on how to improve adaptation, but that means refusal to adapt ends up failure to adapt.
Name the government-run social program that has an objectively defined goal and measurable increments. Name the government social program where someone has said, “We’ve done it. We reached our goal and we’ll be closing down this program.”
Name the government social program that, when seeking its annual refunding, has said, “Another $x million will suffice to finish this project, and then we’ll dissolve this agency.” When you ask a progressive how much more it will take, dollar amounts, to actually, y’know, END poverty, or achieve social justice, or complete prison reform, or graduate every high school student, he has no answer. As Voegeli titled his book, it’s “Never Enough,” because the programs are designed to never end.
Because the be-all and end-all of government social programs is not to reach an objective, it’s to simply be. If, in fact, an agency seems to be running out of beneficiaries, it simply expands the program to encompass more (see, for example, free school lunches — if 40% of a school’s students are eligible for FSLs, then EVERY student in that school is deemed eligible for FSL. How is that sane?)
http://www.usatoday.com/story/news/nation/2014/06/23/stateline-school-lunch-program/11260497/
Finally, re: Obamacare. I’d really love to see an updated CBO scoresheet for this program. Remember that it was originally and deliberately designed with revenue-raising provisions so as to make it appear cost-neutral. But, the long-term care revenue (front loaded for scoring) disappeared. Millions of dollars in subsidies have been paid in error. Premiums priced too low are being increased, and as a beneficiary’s payment responsibility is limited by his income, the increases will be paid via taxpayers. The medical device tax* is profoundly disliked and may be on its way out. The risk corridor payments to insurance companies are being paid whether deserved or not. How much money was wasted on state websites that don’t work? The money was still paid out with nothing to show for it.
Show me the accountability for costs in this program and I’ll be willing to discuss its claimed benefits.
* who in his right mind would impose a tax on GROSS revenue in an industry where it can take years to research, develop, test, commercialize, & build a market for a product? Oh, and it’s also imposed on dual use human-veterinary devices. So if your vet uses a product in treating your dog/cat/fish/bird that falls into that category, he’ll be flowing that tax through to you, the customer. Congratulations, and thank you for your dog’s contribution to Obamacare.
As Rush has often asked, “show me a problem that the left has actually fixed.”