Wednesday, June 29, 2011

Redefining the "Waste" in Waste, Fraud and Abuse

Politicians love to talk about getting rid of waste, fraud and abuse and pundits get all starry eyed when this term is mentioned but, in my view, most of what is mentioned is just fraud and abuse. A $1000 hammer is waste but more specifically it's really just abuse, maybe fraud.

Waste is anything that doesn't pass a cost-benefit analysis. If the "social" benefit isn't enough to justify the taxes collected and spent then that is waste. Or if a department or program continues to not be able to meet its goals and we continue to pay for it, that is waste.

For example, the Department of Education has been around forty years. That seems like plenty of time for it to justify its existence. Yet, every year we spend more and more without moving the needle on student achievement. That is waste. Eliminating waste would mean eliminating the Department of Education.

For some reason, liberal economists have a hard time with this concept. They believe if you just have the right people who perform the right tweaks, then it will work. But the evidence suggests otherwise. And experience suggests that the pendulum swings of politics will guarantee that who you think is the right person will not always be at the helm.

Instead, they should begin to follow the evidence. Apply the analysis. End those departments and programs that don't work and you won't have to make it your personal mission to educate people on the awesomeness of raising taxes through semantic magic.

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