The Breadth of BrokennessPosted: December 18, 2008 Filed under: Columns, Economic Growth and Productivity, Taxes and Budget Leave a comment »
The breakdown in the financial markets, our huge budgetary mess, and multiple government scandals have only highlighted the depth of our government’s problems. Recently, I noted that the required governmental reforms are so extensive that President Obama will find it difficult to succeed by taking one-off approaches to each of the nation’s problems rather than addressing them in a more unified way. Here I strengthen my case by turning from the depth to the breadth of brokenness of government.
Unfortunately, it’s an easy case to make. If you have any doubt, try the following exercise: stretch your mind across the landscape of government program areas or departments and consider how much spadework must be done almost everywhere you look. See if you agree with my own list:
Health Care: The problems here extend far beyond the number of uninsured and an unsustainable cost growth that compounds this number by making insurance less affordable. Our system subsidizes acute care but seldom prevention, encourages drug companies to work on chronic care drugs rather than on cures that might not require as many drugs, and pays doctors who specialize far more than those who provide the kind of primary care that may be more valuable. Our tax system, meanwhile, gives much larger subsidies to high-income workers than low-income workers to buy insurance.
Tax Policy: Because of multiple tax subsidies, tax rates continue to vary widely among people of equal incomes, means, and needs—thus violating standards of equal justice under the law. The IRS, meanwhile, has so many programs under its jurisdiction that it administers few of them well. It can’t even provide much information on who benefits from its subsidies for housing construction, empowerment zones, or appreciated property.
Social Security: With benefits extending to most couples for more than a quarter of a century of retirement, the program has evolved into a middle-age retirement system. Spreading benefits over so many years means that increasingly smaller shares of spending go to those who are truly old or in need. All of this would be true even if the system were in financial balance.
Disability: Government programs for the disabled are themselves on the disabled list! They exhibit almost total inability to help the disabled get off the disability roles and return to work. Meanwhile, the Social Security Administration simply cannot handle its backlogged caseload of applicants.
Environment: The EPA has become so heavily politicized over time that it makes it hard to move forward on the environment and energy front. The benefits and costs of environmental efforts are often hard to measure, but we’ll never get anywhere so long as the public sees the agency as basically a shill for whichever party is in power.
Housing: As if current housing woes weren’t enough in a financial meltdown, the tax system provides generous tax subsidies to those who are rich enough to own several homes, but nothing to those with too little income to pay tax! Meanwhile, the Department of Housing and Urban Development has been continually plagued with accusations of mismanagement and sometimes even corruption.
Consumer Protection: Where was consumer protection as the mortgage crisis developed? Who’s helping those who today are trapped in bad student or car loans? What protections are provided against junk mail with checks that really aren’t checks or apparent government contacts that aren’t from the government?
Antitrust: Where are the attacks on modern oligopolies? Hollywood tells us to hate the industrial concentration of power, but what about concentration in modern industries like entertainment or health care? These oligopolies bear some of the responsibility for the increasing inequality in income.
Justice: How did the Justice Department become so politicized that political checks were being made against even new civil servants? If we can’t trust Justice to promote a rule of law, then we’re all in big trouble.
Transportation: Although infrastructure arguments are sometimes exaggerated, there is much merit to concerns about crumbling bridges and about building a 21st century transportation system that would supplement and move beyond the rail and highway developments of the 19th and 20th centuries.
Education: While the federal government’s latest big effort, No Child Left Behind, encouraged states to better measure children’s progress, its overall focus has been too narrow—passing some minimum standard of qualification. That simply led to incentives to focus resources on about 10 percent of all kids—those just below the minimum standard—so that “progress” could be proven on that basis alone. Those above the standard and too far below it to stand much chance of passing the qualifying test were effectively left out of the equation. More generally, primary and secondary education remains stuck in a 19th century model in which kids are supposed to go home in the afternoon to do the chores and in the summer to take in the crops.
Pension Policy: How can our elected officials justify a system that subsidizes pension saving to the tune of $150 billion a year, yet results in little or zero personal saving? Meanwhile, the data are clear: most low and average income households go into retirement little or no retirement saving. By any measure, this subsidy system is not working.
Need I go on? How about agricultural subsidies to the rich? Or the risks faced by the Pension Benefit Guarantee Corporation because of inadequate funding of many pension plans? Or the scandals surrounding the General Services Administration and military contracting? One day you may even find that the way we appoint Senators to a vacant seat may lead some governor to seek bribes. Nah! But you get the picture.
Many government programs were created decades ago for a different economy, a different family and industry structure, and even a different understanding of our economic and cultural opportunities. Meanwhile, many of the agonizing debates over the past three decades have represented a see-saw battle, more often over symbol than substance, leaving in place agencies and programs often moribund and incapable of meeting many modern needs.
We’re not going to fix a government this broken with a little glue.