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What The Candidates Should Know: Government Spending

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Normally, it takes about ten years to design an aircraft and get it into production.  This is with an established company that is a going concern.  It would take even longer if the project came into the hands of a company that had to assemble a team of engineers, build a manufacturing facility, and start from zero. This is why it's in the Pentagon's interest to keep the various companies that comprise the "defense industry" alive and well, even if it means buying inferior models. 

Another factor is the increasingly rapid pace of technological advances.  The slogan, "If it works, it's obsolete," is not just a joke.  It is quite literally true.  Better weapons are always on the drawing boards.  This means that a weapon that is the latest thing today will be obsolete as soon as the competition brings out a new model.  This does not necessarily mean a competing company in this country.  To return to the example of the B-1, if the Russians bring out a new fighter with enhanced electronics and missiles that is capable of shooting it down, it's time to go back to the drawing board and improve the B-1, or to design a completely new aircraft.

Often a new plane is not practical because of the huge cost involved.  It's cheaper to "upgrade" the existing model, to tack on some improvements that will give it the ability to do a better job.  This, too, costs money, and it's impossible to anticipate the cost when ordering the original model.

This close examination of one weapon has given some insight into why the government spends more and more, and why there is no hope for ever keeping spending down. Also, we must remember that the very structure of our tax system and the agencies which collect the money is redundant and wasteful.  To give a simple example, a resident of New York City pays Federal income tax.  He also pays New York State income tax.  On top of this, he has to file a New York City income tax return.  Here we have three redundant bureaucracies doing the same job. 

Now let's look at local government and see why it spends money wastefully. We have, by law and by tradition, a system of local governments because of the states' rights provision in the Constitution.  We shun a strong central government, even though that's what we have today.  Actually, we have the worst of both possible worlds.  Let's look at one function of local government to see how this works in practice.  Let's look at the police.

Americans don't want a national police force.  We like to keep our police forces local, under local control.  What we get is a complex system of competing and overlapping jurisdictions, each with its own police force, each following its own laws and procedures. Typically, a criminal is arrested by a town police force for violating the state's criminal code.  He's housed in the town jail until arraigned in the state court, by a county prosecutor.  During the trial, he's the responsibility of the county sheriff, who keeps him in the county jail.  If he's convicted, and the violation is a major one, he then goes to the state prison to serve his sentence.

Let's take another example, a more common one of a simple traffic accident.  Two cars collide in a street the centerline of which is the boundary between the city and the county.  A city police officer arriving at the scene determines that, as the cars have come to rest in the county, it's the responsibility of the sheriff's office, and he radios for a deputy to come do the paperwork.  He stands by, re-directing traffic, while the deputy is on his way  When the deputy arrives, he pursues the investigation, and cites one of the parties for violating a state traffic law, thereby causing the accident.  As a routine part of his investigation, he radios for a "10-29," a routine check to determine if either of the parties is a fugitive from justice.  His dispatcher sends a request to the state crime computer, and one to the National Crime Information Center, run by the U.S. Department of Justice in Washington, to see if there are any interstate "wants" on them.

These are normal, routine, bureaucratic complications.  They involve a lot of overly-complicated paperwork, which costs money. Thus, we see that the cost of inefficiencies in our government can't be measured only in money.  It's far more serious than that.  The net result is that, although we pay more for government than ever before, we are not getting what we're paying for.

Our various levels of government increase in size and cost, but not in effectiveness.  In fact, as long as they continue to be organized the way they are, they'll continue to be less effective with each passing year.  Less effective and more expensive.  That is the hard reality of the "system."  That is why government spending will not decrease, regardless of the promises of politicians.

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www.paradigmventure.com

Sheldon Drobny was the co-founder of Nova M radio and Air America Radio. He has supported many philanthropic causes. Mr. Drobny specializes in business and tax matters and is admitted to practice before the U.S. Tax Court as a non-attorney. Less (more...)
 
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