Thursday, 10 April, 2003
Governments are incapable of fiscal responsibility
It struck me today as I was listening reports of budget debates on the car radio, that government—at least our form of representative government—cannot be fiscally responsible in the long term. My reasoning is simple. The people in power want to stay in power, and others want to be elected in their place. Both groups attempt to win votes by making promises with other people's money (OPM). To be fair (or equally critical), it's not just elected officials that suffer from OPM disease. Career bureaucrats have a vested interest in growing their organizations, and use a variety of means to ensure that their budgets are increased every year. As the years go by and people get accustomed to more and more things, the only way to promise more is to raise taxes and spend more. At some point, the whole house of cards has to come crumbling down.
Not that I can think of any other workable form of government that is any more fiscally responsible. On a small scale, a loose organization similar to a homeowner's association would work, but such a thing doesn't scale well. Anarchy (or what the wacko Libertarians like to call "pure Capitalism") can't work because it makes the flawed assumption that all people share the same belief system and are equally capable of understanding the consequences of their actions. A benign dictatorship might work for a short period, although there are no examples of such a workable system ruling a large number of people.
What frightens me most about this is that government inefficiency (and thus the citizens' displeasure with increasing taxes) appears to increase with the square of the government's size. And the results of an unhappy populace are not pretty.