Bret Piatt

If “Big Government” is more wasteful, less efficient, and generally just not a good idea why is “Big Business” more efficient, more profitable, and generally able to succeed without groundbreaking nimble new inventions?

So what do the failed “Big Businesses” have in common with the inefficient “Big Government”?  We have the “all in” style risk based bonus systems in the financial sector — this falls in both the accountability and corruption buckets.  Outside the financial sector we have many of the major corporations of the post-war era that have had to file bankrupcy due to lack of accountability over their workers because of the union shield.

Both of those paradigms exist in the federal government.  Elected representatives “know” if they take care of people they’ll get rewarded when they leave office.  This is similar to the financial sector problem as the represenatitive spends/takes risks with other people’s money and if it goes well stands to gain huge personal benefit.

On the other side of the coin the federal government is more unionized than any other industry.  Even non-union employees in government aren’t going to be eligible for performance related bonus plans.  Nobody is held accountable to perform above a baseline minimum, nobody is asked to do their best.

So how do we fix this?  The same way we fix other places where we have a lack of accountability and corruption.  Use existing laws or put better ones in place to enforce transparency and honesty.  Pushing the spending from federal down to state just spreads out the corruption, localizes it, and makes government less efficient overall for the same reasons small business is less efficient than big business.

Term limits don’t fix the “all in” mentality, they may perhaps make it worse as representatives know they have a short time to push through their “payday” legislation.  People that pass legislation need to be ineligible to recieve financial benefit from it.  This make may it very difficult to go from Congress back to the private sector but I’d rather pay them a congressional salary pension for life than encourage them to spend $100B of our money so they can get a $20M paycheck after they’re out of office.

The union issue is more complicated.  In a utopian society people would do their best each day regardless of an “incentive pay for performance” plan.  We sadly don’t live in utopia so people with no incentive often do the minimum required.  The best way to fix this is any job with a measured baseline of performance needs to be automated.  If it is too complicated to automate then people deserve some sort of performance incentive.  We don’t have to fix this overnight, let the current generation of workers finish out their careers and phase them out moving foward.

If we don’t address both accountability and corruption we will end up bankrupting our country.  In some states now people are paying > 50% of their income in “income tax” (NY and CA), start adding on property tax, sales tax, gas tax, and all of the other taxes and up to 2/3rds of some people’s earnings are going to taxes.  We also have some of the highest corporate tax rates in the world incenting businesses to evaluate opportunities to move to other nations.  Raising taxes isn’t the answer, we’re running out of room to do it — futher increases run the risk of decreasing federal revenues as income earners will look for opportunities elsewhere.