Friday, September 18, 2009

History Reveals Government Isn't The Answer

I have been saying for a while that everything the government touches ends up broken and dysfunctional. With that in mind, why in the world would we allow the government to take control of medicine which amounts to 20% of our economy? Previous behavior is the best predictor of future behavior so I spent some time on researching their record. Perhaps we can look and see what the government has done in the past.

Here are examples of what the government has controlled and how (un)successful the government has been.

The United States Post Office: it was established in 1775. They have had 234 years to get it under control. Unfortunately, the US Postal Service is bankrupt and dysfunctional. When the number of complaints grow about customer service in the private sector businesses are very much at risk of losing everything so issues are addressed quickly. When the number of complaints grew at Post Offices across the country about the amount of time people had to wait in line they took an incredible measure. The removed the clocks from every Post Office waiting area in the country. Good Job! Idiots!

Social Security: it was established in 1935 and surely the government has gotten it right in the past 74 years, right? Not even close. The mark of well-run companies is that they accurately plan for the future through a series of investments, cutbacks and expansions. Since the government has many "experts" that wish to dictate how businesses should be run, I'm sure they know that. One would think so but unfortunately, the Social Security Administration has not at all planned for the future. The Congressional Budget Office reported just 6 months ago (March, 2009) that Social Security would continue operating with an expected surplus until 2016. However, they have since adjusted that projection. Now the CBO indicates that outlays will exceed revenue in 2010. "Outlays will exceed revenue" is congressional language for "We're Broke". Nice going "Government".

Fannie Mae: though it was founded in 1938 as a part of FDR's "New Deal", it was chartered by Congress in 1968 as a "Government Sponsored Enterprise" and surely 71 years is long enough to have been successful. If they weren't doing well before 1968, they have had 41 years to work out any kinks they may have had. That just isn't true for Uncle Sam. Years of poor business practices lead to gigantic financial losses for Fannie. The lack of revenue forced Fannie Mae to "borrow" money from the government, which sounds a lot like me borrowing money from myself, but anyway. Don't worry because I'm sure Fannie can pay itself back right away, right? No way. In the 2nd quarter of this year Fannie reported a loss of 14.8 Billion which is a lot better than the 1st quarter in which they lost 23.2 Billion. It sure doesn't seem like government interference in any sector ever works.

The War on Poverty: This program was kicked-off in 1964 and one might think that 1 trillion dollars and 45 years would be enough to become successful...since many businesses and programs in the provate sector have done so much quicker and in much less time. Unfortunately, the government needs more time and more money. In January 1988 President Reagan described this program very well.

"Today the Federal Government has 59 major welfare programs and spends more than $100 billion a year on them. What has all this money done? Well, too often it has only made poverty harder to escape. Federal welfare programs have created a massive social problem. With the best of intentions, government created a poverty trap that wreaks havoc on the very support system the poor need most to lift themselves out of poverty: the family. Dependency has become the one enduring heirloom, passed from one generation to the next, of too many fragmented families."

The largest redistrubution of wealth in human history has not ended poverty as 37 million Americans remain in poverty. So to once again quote President Reagan, "The Federal Government declared war on poverty and poverty won". I would add to his words by saying the war continues to be fought with our tax dollars...over 1 trillion of them.

Medicare: This special program began in 1965 and 44 years later it is a financial and beaurocratic nightmare. If the total amount of unfunded obligations of Medicare ($53 Trillion) were divided equally among American households, each household would receive a bill for $440,000. Since the average American income is less than $50,000 annually, imagine giving the government every penny you make, without paying any other bill or even buying food for the next 9+ years. If we all did that, again that is figuring on averages, we would simply eliminate the unfunded Medicare obligations...nothing would have been paid on the national debt or the continuation of the numerous entitlement programs. I think it is safe to say that Medicare is not the flagship of governmental success.

Cash for Clunkers: Perhaps you need a more recent reminder of government ineptitude. Here it is...the Wall Street Journal wrote that Cash for Clunkers is proof that "the feds can't even give away money very well". That statement could have been made about a number of programs, pork, projects or takeovers but the WSJ was specifically talking about this program. While I'm sure the Asian car makers are pleased with the program, it did little for the American public. Sure, a few cars were sold but the program that initially was "funded" (in this case funded is code for borrowed more money from China) with $1 billion. As we know, the program ended up costing American tax payers $3 billion and that isn't counting the amount of intrest we will be paying on the borrowed $3 billion. It may be interesting to see just how many American car companies increased their sales in the month of August, 2009...
Chrysler sales decreased -15%
General Motors sales decreased 20%
Ford sales increased by 17%
However, Honda sales increased 10%
Subaru sales increased 52% and
Hyundai sales increased 47%.

At the end of the program, which didn't come a day too soon, only 39% of the money spent by the government in this goat-rodeo of a debacle went to American companies. Since the money to buy the cars was borrowed from Asia, I guess it is rather ironic that the majority of the money returned there. Or maybe it is just one more reason why we shouldn't trust the government to handle any aspect of our healthcare.

If Americans have any remaining shred of common sense they will not allow the government to take control of our healthcare. The government seems to have the antithesis of "The Midas Touch". Every program they initiate turns out to be a drain on the American public and rarely, if ever, actually functions well.

Here's hoping Americans go vote for REAL change in 2010...and by REAL change I mean fire every elected official and elect people to actually serve the interests of the people who have elected them.

No comments: