Ran into a ten year old Cato report on government waste and its consequences. Still working my way through its 48 pages, but its a fascinating read, with the introduction shown below:
Most Americans think that the federal
government is incompetent and
wasteful. Their negative view is not
surprising given the steady stream of
scandals emanating from Washing-
ton. Scholarly studies support the idea that many federal
activities are misguided and harmful. A recent book on
federal performance by Yale University law professor
Peter Schuck concluded that failure is “endemic.”
What causes all the failures?
First, federal policies rely on top-down planning
and coercion. That tends to create winners and losers,
which is unlike the mutually beneficial relationships of
markets. It also means that federal policies are based
on guesswork because there is no price system to guide
decisionmaking. A further problem is that failed policies
are not weeded out because they are funded by taxes,
which are compulsory and not contingent on perfor-
mance.
Second, the government lacks knowledge about our
complex society. That ignorance is behind many unin-
tended and harmful side effects of federal policies. While
markets gather knowledge from the bottom up and are
rooted in individual preferences, the government’s ac-
tions destroy knowledge and squelch diversity.
Third, legislators often act counter to the general
public interest. They use debt, an opaque tax system,
and other techniques to hide the full costs of programs.
Furthermore, they use logrolling to pass harmful policies
that do not have broad public support.
Fourth, civil servants act within a bureaucratic system
that rewards inertia, not the creation of value. Various re-
forms over the decades have tried to fix the bureaucracy,
but the incentives that generate poor performance are
deeply entrenched in the executive branch.
Fifth, the federal government has grown enormous in
size and scope. Each increment of spending has produced
less value but rising taxpayer costs. Failure has increased
as legislators have become overloaded by the vast array of
programs they have created. Today’s federal budget is 100
times larger than the average state budget, and it is far too
large to adequately oversee.
Management reforms and changes to budget rules
might reduce some types of failure. But the only way to
create a major improvement in performance is to cut the
overall size of the federal government.
https://www.cato.org/sites/cato.org/files/pubs/pdf/pa777.pdf
