The key to measuring how efficacious a spend was, is that someone has to know what the DESIRED RESULT is... Otherwise one can not tell how effective the spend was in helping to attain the DESIRED RESULT... The problem with this based on the G2A WANTS vs NEEDS comments, is that there seems to be a SUPER WIDE RANGE of desired results. We have Liberals that say they think everything in the budget is a NEED. (and we NEED it NOW) And on the other hand we have Conservatives that would probably let folks starve before they voted for a tax increase. (ie "aren't their work houses???") So is efficacious then like beauty? (ie in the eye of the beholder) And if the Liberals truly can not separate WANTS from NEEDS, then how do they seem to always threaten the NEEDS first? Does this not mean that they are intentionally MANIPULATING the citizens? Here are some examples:"There are four kinds of spending, listed here in order of decreasing efficacy – that is, productive of the desired results for the least cost.
The most efficacious form is spending is when you spend your own money on yourself. You know exactly what you need or want, how much you have to spend on it (and all other things), and thus what you are willing /and able/ to pay to get it.
The second most efficacious form of spending is when you spend your money on somebody else. You know exactly how much you are willing to spend, but you have little or no idea of what the other person needs or wants. Most private charity works this way, where you give cash to a charity rather than directly to an individual. If, on the other hand, you give directly to an individual, for example offering transitional housing to an abused woman and her kids, it's even better, almost as good as spending your own money on yourself.
Less efficacious still is when you spend somebody else's money on yourself. You don't consider how much is being spent because your incentive is to simply spend it all. You don't necessarily care about the price you pay and whether or not what you buy is a need, a want or completely frivolous. This is characteristic of those who receive government checks. For example, when building a new taxpayer-funded building, do we really NEED marble fountains, gold statuary, and pearl-inlaid floors? If the money is there, why not? A better example: would anybody in their right mind build a light rail system with their own money, even if they had the billion dollars?
The least efficacious form of spending is when you spend somebody else's money on a third party. you have no idea what the third party needs or wants and you don't care what it costs. The sole incentive seems to be to rid oneself of the responsibility for the spending as quickly as possible. THIS is what all government wealth transfer programs are. [Note: government programs that provide essential services to the general public, such as courts and law enforcement, are closer to category three. Not necessarily as effective as private business would be, but if they can't be contracted out they should be scrutinized occasionally for inefficiencies.] "
- School districts always threaten or enact larger class sizes before chopping the electives, choice programs, arts, sports, bad teachers, busing, etc. Is this because class size is only a WANT and the others are NEEDS, or because their goal is to get parents excited so that a referendum will be passed.
- The cities threaten that reduced local aid will mean fewer cops, firemen, etc instead of proposing chopping park maintenance, activities, administration, etc. Is this because safety and security is a WANT and the others are NEEDS, or is it because FEAR motivates citizens to become involved more than unmowed parks?
- The State threatens lack of health care, increased starvation, increased homelessness, etc instead discussing fewer bike paths, less light rail, less arts /DNR funding, etc. Is this because HHS is only a WANT and the others are NEEDS, or is it because fear and empathy are a very powerful combination when you want to sway public opinion and raise tax rates.
29 comments:
I don't know if the left is playing us, I just think they want to do business the "way they've always done it." They believe in big government and don't want to make tough choices or say the word no. We citizens have to get them to deal with our needs rather than use them against us.
Did you forget that it is the conservatives in the house that have proposed cuts of $1.6 Billion to the HHS budget? How it looks to me is that budgets at both the state and national level are being slashed by the GOP at the expense of the poor. I've read that there soon will be a huge proposed cut to medicaid in DC.
about school budgets, where I live the school board does their best to keep class sizes down. The cut that got the biggest parent protest that I can recall was when 5th grade band was eliminated.
about city budgets, I think Mpls and St. Paul are smart to take a balanced approach to budgeting to remain attractive to middle class tax paying residents (i.e. with things like parks and bikepaths and libraries.) I wouldn't want to live in or near a city like Detroit or Camden, NJ.
Mostly, I disagree with pretty much your whole premise and your generalizations about liberals. I also disagree with the spending efficacies model as described by J. Ewing. I think I get a great deal for the money for the taxes I pay towards my kids educations, certainly a greater value than the $ I spend going out or on vacation.
rikta11,
I think it is a mixed bag. I met a Psychologist once that had been the practice's Manager. He said he had to give up the job because he just could not make hard decisions and follow through regarding the employees. He acknowledged that it just disturbed him too much.
Laurie,
Please prove me wrong then. Offer up 5 things that can be cut / delayed during periods of economic downturn. (ie when revenues are low)
And your thoughts regarding how to contain government cost growth to approximately the inflation rate? If HHS goes up faster, then something has to go up slower... Government spending can not go up 9% per year when our salaries go up 3% per yr. It is simply not sustainable.
The model makes distinctions based on who is doing the spending, whose money is being spent, and who benefits from the spending. It is crystal clear that the person who best knows your wants and needs, is best able to distinguish between the two and who knows best what you are willing to spend on them is YOU.
If you are so worried about the poor, then why will you not allow them the same freedom to determine their wants and needs as you, with your greater resources, can exercise? Why do you believe that a huge, impersonal government bureaucracy can better determine their wants and needs than they can, and then turn around and determine how much YOU are willing to spend providing for it? it's certainly not rational, nor is it compassionate, and it is certainly not efficacious. If we took the money government now spends on the poor and just passed out checks, every poor family would be well into the middle class in income. Since we still have millions of people who are apparently quite poor, we have positive proof that government is not efficacious.
The quandary that you describe, that of government being unable to distinguish between wants and needs, is an inescapable consequence of giving government the money and power to make such spending decisions. The more of these decisions that you leave in private hands, the better off we will all be, and the more decisions you leave in government hands, the less freedom and, I say, happiness we will all enjoy.
J. Ewing
J,
It sounds like you are proposing we adopt Laurie's 100% employment proposal... Every citizen makes at least ~$25,000/yr whether they are working or not. (ie we just write out checks) Did I hear that right? And are you feeling all right?
We probably could get rid of lots of depts and bureaucrats that way... Not sure if fraud would be an issue...
I actually have endorsed, in the past, a full-blown "negative income tax" as a replacement for all government wealth transfer/welfare programs. The earned income tax credit is something like it, but it is in addition to, not a replacement. There are a couple of things we would have to do, the first of which would have to be that there were some sort of work requirement, a requirement that you be making some effort on your own behalf. The second would be that the negative income tax, like the positive, would have to be steeply progressive, that is, you would never be better off earning less. The first would require an army of bureaucrats and rules, and the second would be a playground for politicians, so I have soured on the idea. It's probably better than what we have, for all concerned, but it's politically unlikely and operationally flawed.
Back to the central question, the answer is no. It all comes down to incentives. Politicians have an incentive to buy votes with other people's money, which means that wants and needs have very little to do with their decisions. You and I, on the other hand, when spending our own money, are the peerless experts on what we want and need. The difference in efficacy is as wide as it can be.
J. Ewing
After simplifying them, I think J's order makes sense...
1: Spend your money on self
2: Spend your money on others
3: Spend someone elses money on self
4: Spend someone else's money on others
I can guarantee that most people drive a harder bargain when spending their own money.
And they are less careful when spending some nameless others money. (ie the "rich")
Finally, they are most willing to spend extravagently when they have contributed some into the money pot. Examples of this worst case:
- People paying insurance premiums will not hesitate to claim the most damages. Or they will happily sign up for as many medical tests as are offered. They have a sense that they have paid for it.
- People paying some nominal amount of taxes, yet lobby for expensive programs that benefit their personal interests. Again, they feel they somehow deserve this in recompense for the minimal taxes they pay.
Therefore 3&4 are definitely more likely to be wasteful than 1&2. Imagine if you had to write a check for every medical test, or you had to pay a user fee for every Government service... Just think of the reduction in expenditures that would occur overnight.
Remember one of my favorite Benjamin Franklin quotes: "When the people find they can vote themselves money, that will herald the end of the republic."
It seems a growing number of people are interested in voting themselves money since about 1900... Be it in programs, paths, parks, healthcare, benefits, tax cuts, stadiums, job security, wages, etc... I wonder if Ben's foretelling will come to pass, or if we will learn our lesson sooner than later.
John,
Upon further reflection, I agree that sometimes school boards, city administrators, or state legislators present a worst case scenario for budget cuts in effort to persuade voter/taxpayers of the need for more revenue. I think actual cuts are usually made in what they believe is the least detrimental way possible (unless you're the GOP, lacking in compassion for the plight of the poor)
For slowing the rate of growth of state govt we are going to need to find a way to slow the rate of growth in health care spending in general. I believe the ACA included nearly all current ideas suggested by the experts on how to do this, at least on a small scale/test basis.
For balancing the state budget I have been playing with a budget deficit erasing tool at MinnPost. My solutions eliminate about 80% of the deficit through some combination of tax increases. For the remaining one billion I was surprised to find I could get there with a variety of cost saving reforms. I even choose to cut spec. ed., because it is not cost effective. It would be much smarter to provide needed support to primary level students to help them gain reading proficiency rather than offer remedial education when they are 2 or more years behind.
I waa also curious and looked into Mpls taxes and learned that much of their double digit property tax increase this year was to making up losses in the city employee pension fund. My slight conservative side thought these employees could take a bit of a hit to their pension like most everyone else. It did make me curious as to how my TRA pension fund is doing (to which I typically pay no attention.) If nothing else, your hammering away on personal responsibility has had some effect on me.
Laurie,
Just a note, as a parent with kids. Of course we value the tax dollars spent on Schools. I am not sure those Double Income No Kids would feel the same way...
In fact I know the RAS citizens will be very reluctant to pass another levy. (ie long story...) Thus meaning that they as a whole do not see the marginal dollars that would be raised as an efficacious spend...
Interesting how perspective is critical in this assessment.
Laurie,
We were posting at about the same time, so I did not see your comments until I posted my last 2...
Here is a different paradigm... What if the GOP is actually more empathetic to the poor? What if entrapping them in entitlements and dependency is actually crueler than pushing them out of the nest? (ie hunger is a powerful motivator, that weekend job or meat processing job starts to look pretty good... then a work ethic and self reliance kick in...)
Do Parents that spoil their child help or harm the child, in terms of managing in real life and building self esteem? I know it is a stretch from your seat in the theater, but it may be the truth from their seat.
The problem with cutting Special Ed is that much of that spend is mandated by law and court rulings. Also, Districts often find it is cheaper to provide the service rather than end up in court... Teaching kids that have almost no mental / academic capabilty definitely does not make much sense though.
However, to the Parent of the Spec Ed services kid, they likely see great value in it. If only because it gives them some recovery time. That has to be an incredibly stressful situation.
Your Mpls comment was very enlightening and disturbing. Talk about a nasty catch 22. The markets drop which cause the pension funds to appear under funded. Which means the employer needs to make extra payments to return it to a fully funded status. However since the market is way down, incomes and tax revenues are way down. Thus tax rates need to be raised to get the additional funds.
Now that is just ugly, no wonder companies ran from those types of plans. They were forced to raise cash when sales were way down, and they had no way to force additional revenues. (ie can't force customer's to buy or pay more.)
With most of the markets pretty well rebounded, it seems the tax rate will not need to be raised as much. Unless they were heavily weighted in Real Estate.
Laurie, "I think actual cuts are usually made in what they believe is the least detrimental way possible (unless you're the GOP, lacking in compassion for the plight of the poor)" is a vile slander on Republicans, and you are wrong, to boot.
Republicans as a group donate 5 times as much to charity as do Democrats. Their "compassion" is real, while Democrats think that government handouts are "compassion," which it is not and cannot be, because they aren't spending their own money.
When Republicans "cut," it's usually taxes, which is the kindest cut of all. You do know that the Bush tax cuts gave the greatest percentage cut to low income people, don't you? That it took millions of the poorest off the tax rolls entirely, and gave 33-50% cuts to the next highest bracket, while the top brackets got only about 3%?
"For slowing the rate of growth of state govt we are going to need to find a way to slow the rate of growth in health care spending in general."
You are correct about that one and, while it's another subject, just let me say that the growth of HC spending is driven by the growth in government providing it. Since government doesn't care what that poor guy's health care costs (it's not their money), costs rise unnecessarily. Simple solution to health care cost increases? Get government out of it!
J. Ewing
"They believe in big government and don't want to make tough choices or say the word no."
No one is eager to make tough choices. But I think Democrats are willing to make them, and that willingness to make them is the reason we lost the last election. So now the Republicans, the party of panaceas are in charge, with their mystical faith in the power of markets to solve all of our problems at no charge to anyone. We saw that yesterday with Congressman Ryan's death panel policy, whose only innovation was to save us the cost and trouble of actually hiring the death panel.
--Hiram
Per J's comment,
I was amazed again at receiving, and the impact of the child tax credit when I recently did my taxes. With 3 children, I received $3,000 off my Fed tax bill. For our household, I think that was approximately a ~30% reduction. For lower income households with kids, this alone wipes out their Federal tax bill pretty quickly. By the way, remember that this is one of those evil Bush Tax Cuts...
I have never understood why people who choose to have more kids should pay lower taxes, since kids often cost Society more for the first 18 yrs. But I am happy to have the extra 3 grand in my pocket to help raise those little darlings.
Another cut I appreciate is the Educational Savings Account. (Educ IRA) This is like a ROTH, but specifically for Educational expenses. It allows middle class and lower folks to put $2,000/kid into an account for future post-HS education bills. This was another one of those tax cuts that was going to phase out until it was renewed for 2 yrs in Dec...
My point is that these types of changes had a HUGE beneficial imapact for lower income households.
J,
When I referred the the GOP lack of compassion I was talking about our legislators at both the state and national level who vote against expanding access to health care, when between 22,000 and 45,000 people die each year due to lack of health insurance. I guess the charities do not have the capacity to provide for the costly needs of the poor. And where did you get that statistic that conservatives are 5 times more generous? It sounds bogus to me.
Also, you seem not to know that we have essentially a flat tax, that lower income people pay about the same % as the wealthy when all taxes are considered.
John,
I think you and J. have a fundamentally differnt view of low income people than I do. 25% of workers make less than $9/hr and only about half of working people get employer sponsored health care benefits. Can you imagine trying to raise kids and provide for their medical care on only $19,000 a year? With 9% unemployment rate these workers are unlikely to find a higher paying job.
About that tax break for parents, who do you think will be paying in to SS to support you in your retirement? I don't begrudge my neighbors with their 6 kids for paying no income taxes, kids are costly to raise. With a long term view the govt eventually will come out ahead in terms of tax revenue.
About spec. ed., when I chose that as a reform I was skeptical of the cost savings, at least in the short term. Doing early intervention may even cost more initially, but would be cost effective in the long run. Spec ed. costs have grown tremendously mainly due to qualifying many kids as having a learning disability sometime during their intermediate years and providing services to them all the way through college, for those who go. The other deficit reducing reforms I selected are probably wishful thinking as well, but those are easier to choose than cuts, kind of like our legislartors are doing for some of the $5 billion.
Laurie important notes:
A $19,000 couple with 6 kids is currently making money from the income tax system... And getting food stamps, sliding fees, housing assistance, utility assistance and reduced cost lunches... Plus healthcare mostly paid for in MN. The only taxes they pay are sales taxes, ss taxes and a little in prop tax. (ie note: no tax on food & clothing)
As for funding Social Security... If the kids get "minimal" wage jobs like their parents. We will be lucky if they fund their own Soc Security payments, let alone anyone elses. (ie 15% of little is very little) Remember SS taxes max out at ~$100,000 of income.
By the way, I know several families very well that have low incomes like that. I hope I never end up in that situation, but somehow they get by.
By the way, 2 incomes at $9/hr full time would be ~$37,000. So often the couples end up tag teaming it when the kids are young. Dad works days and Mom works night. Or one of them has 2 jobs... One of my acquaintenances keeps 3 jobs going...
"When I referred the the GOP lack of compassion I was talking about our legislators at both the state and national level who vote against expanding access to health care, when between 22,000 and 45,000 people die each year due to lack of health insurance." -- Laurie
Sorry, but I simply cannot allow an error-ridden statement like that to stand. Our GOP legislators ARE Republicans, and are doing what the millions of Republicans who elected them wanted them to do. You cannot claim the legislators lacked compassion without implying the same of at least 50% of your fellow citizens. Beyond that, it is generally improper, both as a matter of good logic and good manners, to impute evil motivations to your opponents. What you are doing is to somehow equate compassion with spending great gobs of taxpayer money on something you want done, but with somebody else's money rather than your own. And you don't seem to care whether it is efficacious or not.
You claim it is evil not to expand "access to health care" when government can do absolutely no such thing. When Obamacare is fully operational there will be not one doctor more than there is today (and quite possibly about 30% less, if the surveys are correct). What government can do is to offer to pay for health care for certain people, but right now Medicare and Medicaid pay so little that many doctors cannot afford to treat those patients. So what is more compassionate, telling people you will pay for their health care and having them be unable to get it, or trying to find a way for them to actually get healthcare without breaking the bank? I wish I could find the Mayo study which said that getting rid of the government health insurance model would cut US medical costs by half, But I can tell you that I have tried it both ways, and the cost IS half, if you do it right.
Finally this notion that all of these people are dying for lack of health insurance is simply a canard thrown up by those Democrats and Socialists that believe they should make every decision in our lives. Everybody can, by law, be treated in the emergency room for whatever ails them. There are 9 million people in the country eligible for Medicaid who haven't applied for it. Whose fault is that? People can die for lack of health CARE, but nobody dies from lack of "access to" health INSURANCE.
J. Ewing
John,
Just to clarify, is your pt that there should be no tax credit for a parent raising a child or that tax credits should be given for say up to 2 children? Would your maximum tax credit given for children be different for low income families, whose children are more likely to be a drain on society? My college educated neighbors' don't use social services and their 6 children are likely to be solid contributing taxpayers eventually, as they are all doing well in the districts gifted program. Does that make this family more deserving of a sizable tax break?
Also, I would say the educ IRA is a nice middle and upper class tax break. Lower income people won't likely have money to fund that. (I wish we were better $ managers and had been funding that over the years.)
J,
We disagree over so much that there is little pt for online discussion. I could post links to the studies from which I drew the 22,000-45,000 numbers, but I don't think they would persuade you. Surely, you can imagine someone dying young from untreated heart disease or cancer diagnosed at a late stage. Maybe you are right that conservative voters have the same type of compassion as the leaders they elect. I wish I understood it. To me it appears to extend right up until a baby's birth.
about that whole cost business, why is it the rest of the developed world (~20 countries) govt provides universal health care at a lower cost than the USA? Btw, I do agree with you on one thing, that medicaid payments are a such a low level that it limits access to doctors.
Laurie,
I agree that it is challenging holding conversations with people that are polarized. I guess I have pretty much given up trying to convince anyone of any thing. (ie their 40+ yrs of self and society brain washing is hard to undo) My goal is only to:
"Raising social involvement, self awareness and self improvement topics, because our communities are the sum of our personal beliefs, behaviors, action or inaction. Only "we" can improve our family, work place, school, city, country, etc."
With this said, I just continue to challenge the fluff from both extremes. Then I hope that readers will at least look in the mirror a bit more and question what they believe, and why they believe it. (ie self awareness) In summary, if coming to common ground with J is a goal for you. You will likely be waiting a long time.
As for child tax credits and educational IRA's, they were just examples of how the "Bush" tax cuts had the largest percentage benefit for the less well to do. The Liberals seem to keep forgetting that in their rhetoric.
Just like with J, I am not trying to convince you of anything... Just trying to provide a different view of "reality/truth".
John, at last you have found something we agree on. I, too, have given up HOPE of convincing people that there is a reality out there, but I somehow feel obligated to continue to try. The reality to which I refer are things like you can't change human nature, and that politicians cannot repeal the Law of Supply and Demand nor amend the Laws of Physics.
I know I come across as "passive aggressive," but I'm trying to engage in a factual debate, presenting the case for the (OK, "far-right, extremist") conservative viewpoint. I can do no other. For example, the quality of care in socialized-medicine countries is poorer than what we in the US will accept, but their costs are about half of ours. IF we did as the Mayo study recommended, our quality would go UP and costs would be one half of what they are now, about what these other countries (the better of them), now spend. It's the immutable laws of economics that government services are less efficacious (mode 1 spending vs mode 4)than the private sector.
J. Ewing
"Surely, you can imagine someone dying young from untreated heart disease or cancer diagnosed at a late stage." -- Laurie
Absolutely I can imagine it. What I cannot imagine is why you believe that some sort of taxpayer-funded government health insurance program, however well-intended, would make the least bit of difference in this situation. There are already, as I said, 9 million people eligible for Medicare who do not sign up for it. if 45,000 of them die every year, that's 1/2 of 1%, better than the general population!
Please feel free to disagree, but consider the facts, please.
J. Ewing
John,
I enjoy reading and commenting on your blog for all the reasons you describe. It is interesting, but not surprising how often the opposities sides are operating from a completely different set of facts.
J.
I assume that once in a while you may have some accurate facts that are different from what I know/believe, I just haven't figured out how to recognize them yet. I assume the 9 million you refer to are people eligible but not enrolled in medicaid. I have never seen this, but I am willing to grant that some such large number is plausible.
Laurie, your skepticism is well warranted. I remember facts pretty well, but almost never where I come by them. I applaud your open-mindedness, and suggest that, if one of my facts seems a particularly compelling argument against what you believe, that you double-check it for yourself. Thanks, and let me know where I'm wrong.
J. Ewing
J,
The problem with good memories is that we only remember things that resonate with us... (ie can't remember what don't notice) Worse yet, we often only resonate with things that support our world view...
Please make an effort to post more web addresses, so we can read them and see if we interpret the source the same way you do. Thanks.
Yes, we only remember those facts that agree with us, and to some extent imperfectly, but that doesn't make the facts any less factual. My problem is I remember the fact and not the source, although there are some sources I trust and some I do not, and I don't generally use facts from sources I consider questionable.
J. E.
Again, back on topic, the answer is no, absolutely not, can't happen. Or at least that's the way to bet, and you will win 95% or better of the time.
J. E.
J,
Using "the google" is fun and surprisingly easy. For example entering "9 million eligible but not enrolled in medicaid" turned up this hit
(37% of 19 million uninsured works out to be about 7 million people.)
Another quick search of the source of the statistic and you can decide if it is to be trusted. (RWJF sounds OK to me)
Another hit I followed brought me to the Cato Institute, which falls on my list of conservative and thus unreliable sources. They used the 9 million people figure, but in a different way.
Anyhow, I rate your statistic as mostly true and also news to me.
"conservative and thus unreliable" ??
I think I've found the source of our disagreement. I believe the truth is where you find it, and that you can add two plus two to get four. Every time.
J.
J,
The "unreliable because conservative organization" comment was slightly tongue in cheek, but not too much. I would scrutinize information more closely and dismiss if the study was written in house. If it was analysis of study done by some other organiztion, such as the RWJF, that I mentioned, I would be much more likely to accept it as accurate. Aren't you skeptical of info from lefty organizations? I could post all kinds of facts related to the ACA and the overall comparative quality of our healthcare system that you would dismiss out of hand. Maybe I'll do that sometime.
I wouldn't dismiss your information out of hand. What I would do is compare it to the other sources of information I have and see if it adds up.
Thus I find even the most leftist sources can be useful. I often find they will use a factual number, and then draw exactly the wrong conclusion from it.
J.
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