8 Sep 2010

Government failure in perspective

WEH strikes again!
  • The U.S. Postal Service was established in 1775. You have had 234 years to get it right and it is broke.

  • Social Security was established in 1935. You have had 74 years to get it right and it is broke.

  • Fannie Mae was established in 1938. You have had 71 years to get it right and it is broke

  • War on Poverty started in 1964. You have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to "the poor" and somehow the poor are still poor.

  • Medicare and Medicaid were established in 1965. You have had 44 years to get it right and they are broke.

  • Freddie Mac was established in 1970. You have had 39 years to get it right and it is broke.

  • The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 32 years to get it right and it is an abysmal failure.


  1. I'm trying to decide if I find it amusing, or depressing, that you list so many spectacularly successful programs while claiming they are failures.

    Perhaps WEH would like to compile a similar list for us, of all the corporate entities that have been around for similar lengths of time and aren't "broke?" No, please - the last thing I want to read is more of his ideological polemic.

  2. @albionwood
    To be fair, he only claimed that the DOE was a failure and it seems like he backed that statement up fairly well. You could reasonably say that he called the War on Poverty a failure as well. That's not actually a program but you really have to admit that the endeavor hasn't met with a great deal of success. With everything else, the claim was simply that they are broke. Aren't they?
    I'd also (really, this isn't sarcasm) like to know exactly which of those programs you would classify as "spectacularly successful" and on what criteria you would base that assessment. I can make a fair argument in favor of the USPS but the rest seem to be, at best, shining examples of government mediocrity.

  3. DW emails: "Do you personally believe that the postal service, social security, fannie mae and freddy mac, and medicare are truly bankrupt? If the answer is no, you probably shouldn't allow others to spread Karl Rove propaganda using your blog."

  4. LL emails: "All of a sudden you are applying right wing standards to everything. What's happened to you?"

  5. @Albion -- I agree with Robpublican

    @DW -- yes, they are technically bankrupt. Of course, they will not go bankrupt, since a combo of cutting benefits and raising taxes will balance the books. Karl Rove is a liar, but these are not lies.

    @LL -- see next post on my politics...

  6. DOE and "War on Poverty" I will grant. ("War on" anything is pretty much a failure from the get-go, but nevertheless, it should be noted that something has certainly been successful at lifting people out of poverty - the percentages have fallen dramatically.)

    USPS still delivers a letter in a day, across tremendous distances, for a tiny fraction of the cost of one cup of coffee. I don't mind subsidizing that service, because it has obvious social benefit. Show me another example of a 234-year-old institution that fulfills its purpose so well. Or show me how well UPS and FedEx are doing 200 years from now.

    SocSec- not broke, yet. All the talk about it is based on assumptions. This is an ideological fixation.

    Fannie Mae, Freddie Mac - successful in terms of their purpose, which was (and is) to increase private home ownership in America. Recently they have erred badly (along with a lot of other corporations). Are you really going along with the anti-capitalists who castigate the entire system on the basis of the last three years?

    Medicare should be the model of health care funding for the country - even DZ claims to want single-payer, which means Medicare for all. It isn't broke, and it's a much more efficient payer than private insurance companies. This is probably the most egregious ideological stance in the entire diatribe.

    Again, this is an asymmetrical argument, because nobody is comparing any of these institutions to other models that have performed more successfully. The hypocrisy of this post is most apparent in the mentions of Fannie Mae and Freddie Mac. How many years did Lehman Brothers have to "get it right" before they collapsed? AIG? Merrill Lynch? GMC?

  7. @albionwood -- you need to start including "opportunity cost" in your thoughts. Subsidies for USPS, the war on poverty and fannie/freddie all deliver "some result" AT A COST of inefficient pricing, higher taxes and social fracture, and market distortion and bankruptcy, respectively.

    You did, in fact, put your finger on the Key. Lehman went bankrupt due to failure. None of these government operations are allowed to go bankrupt -- so they continue to divert our attention, tax our resources, and prevent better replacements from emerging.

  8. @DZ - Are you seriously suggesting that the USPS ought to be allowed to fail?

    You seem to imply that there wouldn't be equivalent costs if the gov't didn't support these programs. Again, it's asymmetrical thinking. What would the cost to society be if the USPS disappeared?

    Most of the time I agree with you about the inefficiency and lack of accountability associated with government-run programs, especially when it comes to resource allocations. But WEH's post isn't analytical, it's just a right-wing anti-government polemic. Your blog deserves better.

  9. @albionwood -- I'd let USPS fail yes. Do you prefer "too big to fail" wrt government programs too?

    The cost to society would be POSITIVE, since USPS destroys resources.

    Take a look at KPN, in Holland.

  10. WEH emails:

    @albionwood said...

    "SocSec- not broke, yet. All the talk about it is based on assumptions. This is an ideological fixation."

    Lets see. Its broke from the get-go as it was never funded. Social Security is the worlds biggest ponzi scheme. Hence it was always broke (never had any real equity) and merely based itself on other people's money and demographics. Now that the demographics have changed along with life expectancy, the ponzi scheme begins to accelerate toward failure.

  11. Given that government fails at EVERYTHING it does, why do we even put up with it?

    -- John Seiler


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