Fighting the Good Fight

Yesterday on Brazen Careerist, a sensational article on class warfare popped up. I offered my two cents there, but I thought the topic was important enough to highlight further and keep the conversation going. My comment didn't so much dive into the topic of class warfare as much as it dealt with my ideas about how to solve the problems ancillary to it: unfair and complex tax code, inefficiency of socialized programs, lack of competition. The free market offers solutions that can be applied to government, but legislation rarely takes into consideration those mechanisms. Here is the comment, and I'd love to keep the conversation going here. (Mostly because I have no time to post anything else as I'm writing a paper on the failures of Medicare...I have a lot of posts in the wings, so stay tuned...)

To Brazen Careerist's Tim Weaver:

My main contention is not that I oppose paying taxes.
Furthermore, I don't loathe all socialized programs, per say, but their bloated cost structures and inefficient execution. I have indicated numerous times I support a flat tax to fund public spending (around 15-17%) with anyone earning under approx. $40,000/yr. be exempt, and possibly include a graded tax introduction for the beginning brackets. (eg - $40,001 pays 5%, $50,000 pays 10%, etc.) Basic arithmetic shows us that under such a system, the richer you are the more you will naturally pay out in taxes. This solution could hardly be argued "unfair."

The other concern is that ever-increasing taxes are paradoxically resulting in ever-decreasing efficiency and satisfaction with results of socialized programs. There is ample evidence many social programs are failing. You would not find me complaining about socialized medicine if it were demonstrated to be successful, but the reality is that increased expenditures have not led to proportionately higher quality care or standards. This is a paradox unlike most other areas where increased expenditures over time generally lead to reduced costs, higher quality, and better outcomes. Eg, computers, telephones, electronics, automobiles.

Milton Friedman describes this phenomenon, “Some years ago, the British physician Max Gammon, after an extensive study of the British system of socialized medicine, formulated what he called "the theory of bureaucratic displacement." He observed that in "a bureaucratic system . . . increase in expenditure will be matched by fall in production. . . . Such systems will act rather like ‘black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ‘emitted production.’" Gammon’s observations for the British system have their exact parallel in the partly socialized U.S. medical system. Here, too, input has been going up sharply relative to output. This tendency can be documented particularly clearly for hospitals, thanks to the availability of high-quality data for a long period.” (Friedman, Hoover.org)

A tax system that is paired with entitlements rather than budgets is doomed to failure. Eligibilty for programs are increasing, and those who have the means to provide funding are disappearing as they join the ranks of the recipients, or direct
their money outside our tax system. I fully support a fixed, flat tax collection, and using whatever taxes are gathered to fit within a budget. Excessive deficit spending cannot be tolerated and supported by tax payers for long without completely bankrupting a country.

The points I bring up cannot be ignored in any rational conversation. Solutions must at least consider that socialized programs are failing, and increasing funding without some kind of accountability and competition mechanisms will not improve them. There is nothing that prohibits the government from competing with private organizations to provide service with the exception of their own legislation. A great example occurred in Arizona with garbage collection. The public works dept. was
ineffectual at collecting garbage in a timely and complete manner. Private companies were sought to replace the public system. However, instead of fully privatizing collection, the government was allowed to compete, on an equal level for procuring the services. Over a period of years, the public department won the contract back (I don't know if subsidy was involved, but if it was, that could have been a large factor) but the overall point is that competition does not have to be relegated to the private sector. If the government were allowed to compete and be held accountable, I maintain we'd see far better performance from them.