When Federal Government ‘Saves Money’ And Gets ‘Smaller Sized’ All Of Us Lose

Many state we should run federal government like a company and save cash by cutting spending and making federal government smaller. Does this work? Do We the Peopleindividuals truly save money by doing these things?

Have you heard the expression penny-wise and pound-foolish? How about a stitch in time saves 9? Maybe eating the seed corn? When government conserves cash, all these snippets of time-honored knowledge, warning of exactly what happens to those who tryattempt to do it on the inexpensive, must enter your mind.


You can save cash by not altering the oil in your automobile. However have you ever seen a vehicle that has never ever had its oil changed? After a while white smoke pours out the back due to the fact that the rings are messed up. Other parts of the engine are likewise being ruined. Ultimately the engine will seize up and stop and you need to either change the engine or scrap the car. A basic and inexpensive treatment every couple of months would have avoided lots of countless dollars in costs later.

After the Reagan tax cuts we made federal government smaller in several ways that are returning to bite us now. One method we saved cash by not changing the oil was by delaying upkeep of the countrys infrastructure – the water systems, levees, dams, roads, bridges, airports, ports, rails systems, electrical systems, and the rest of the important things all of us rely on to bring us safe water, get us to work, ship items and usually move our economy and live our lives.

Now the American Society of Civil Engineers (ASCE) most currentnewest Facilities Credit report Card approximates we require to spend $3.6 trillion simply to bring the facilities as much as where it need to be, never ever mind capturingreaching the rest of the word with high-speed rail and clever electrical grid systems. The bill is getting more pricey every year, and individuals are dying as bridges, roads and other vital infrastructure parts fail. Thousands passed away in New Orleans when the levees failed.

Deferring maintenance is likewise known as eating the seed corn. As the infrastructure weakens, companies discover it harder to get things done, individuals discover it harder to get to work. The prosperity that comes from excellent facilities erodes, so the tax base erodes, the issues speed up. This is likewise knowncalled, Hey look around you in 2016 America.


The Flint catastrophe reveals how much money big federal government in fact saves us.

Michigan Republicans triedaimed to save money, make federal government smaller sized and run the city of Flint like a company. Countless humans ended up being poisoned. Now someone is going to need to pay to cover the health care requirements of all those individuals. That somebody might be the peopleindividuals themselves or maybe everyone will join in through our federal government, however an expense is a cost.

Somebody will needhave to cover either the remedial education cost for all the kids whose brains were impacted by lead, or the societal expenses if this is not done. Then there is the cost to change Flints water pipelines, the cost of plunging property values, the cost of all the businessesbusiness that will choose to leave or not find in Flint.

Expenses, expenses, expenses, some borne by government, the majority of borne by people however costs however – due to the fact that Republicans stated we ought to run federal government like a company and conserve cash.

Flint showsdemonstrates how fundamental federal government spending conserves everyone from paying the massive expenses of dealing with the threat of risky water.

Cutting Senior Nutrition Programs

The post Heres A Sequester Cut Youll Feel In Your Digestive tract described the results from budget plan cuts required by Republicans wantingwishing to make federal government smaller. The sequester cuts in senior dietary programs caused elders to searching forhave to be hospitalized for malnutrition – which costs federal government a remarkable amount more than the cost savings from cutting.

[F] or all the damage these terrible cuts do to actual, genuine individuals, they do not even really cut spending, they enhance spending. Because doing terrible things to real, real individuals causes vicious outcomes.

If government conserves money by cutting dietary programs, government winds up paying a lot of money to deal with malnutrition. If federal government wont pay those costs due to the fact that it is saving money by denying healthcare services those expenses do not go away, they are just shifted onto people. The affected individuals need to pay, one method or another, with their money or their health. The communities they live in need to pay as its members suffer or end up being impoverished.

Californias Bay Bridge

California conserved cash by purchasing Chinese steel rather of utilizing local suppliers when restoring the San Francisco Bay Bridge. The result? From Need to Be Made In America!:

This outsourcing cost of countless American production tasks (3.5 million man-hours), which implied:

? loss of state and federal tax revenue from taxes on the earnings and taxes of the workers and taxes on the business that employed them,
? outgoing cost of unemployment benefits, food stamps and other safety net programs, cost of resulting repossessions,
? the ripple resultcausal sequence economic costs of all these lost jobs– lost sales at stores, dining establishments, filling station, and so on,
? loss of employee training and in-country production infrastructure.

Simply to top it off, by purchasing the steel from China, California Taxpayers Financed A New Chinese Rival!:

Never mind the cost of lost tax earnings, unemployment advantageswelfare, food stamps and other security net programs for the lost workers and bankrupted business that resulted. And never ever mind the expense to the larger economy and country from the foreclosures, closed companies, lost jobs, and so on

. […] California paid for this Chinese state-owned company to develop its capacity to do significant infrastructure jobs like this one. And they will be bidding versus American business on job in the United States and around the world from now on.

One state agency conserved money. Countless employees, the states economy, other state agencies, the federal government and American companies really hoping to bid on bridge tasks all over the world? They paid and continue to pay the cost.


Regional, state and Federally, federal government save money by privatizing services and offering buildings and other assets. But research studies have revealed exactly what truly happens when governments conserve money by privatizing.

What truly takes place when, say, a city conserves cash by privatizing, for example, its waste pickup services? The current employees, paid an OKAY salary, most likely with good advantages, are laid off. The specialist works with people at low or base pay with few or no benefits. The business saves cash by cutting back on personnel costs, services and maintenance of devices.

The previous city staff members, if they can discover jobs at all, will be paid extremely little bit, homes enter into foreclosure – which decreases property values citywide. They stop being able to do much shopping, injuring the regional economy. They likely will require public help, which suggests costs were shifted to another branch of federal government rather of being conserved. Their kids will require unique services in the schools, as bad kids frequently do. And on it goes. Obviously, they are not paying taxes.

On the other hand the new employees wont be paid enough to purchase houses, do much shopping, or pay much in taxes. They most likely will qualify for public assistance; their kids will need special attention in the schools.

The privatization scheme forces people into poverty and onto public support, deteriorating the tax base, requiring regional incomes and building values down and generally putting all of us even more under the thumb of those who have encouraged people who private companies constantly do everything better than federal government. The specialist business are typically professionals in avoiding taxation themselves. Something personal companies are excellent at is driving every advantage of our economy upwards to a concentrated and privileged couple of.


Another current example that revealeddemonstrated how federal government spending in fact saves each of us cash is Sen. Bernie Sanders proposal for a nationwide Medicare-for-All health system. Rather of shifting the costs onto people through higher premiums, co-pays and deductibles, Medicare-for-All just covers everybody and does so at a lower aggregate cost.

While government may invest money and we may need to pay more taxes, the end result is a big net savings. We would all pay a little bit more in taxes and a lot less in premiums, co-pays and deductibles. On the other hand the countrys total health care expenses would drop significantly. It is estimated that the typical middle class household would conserve over $5,000 in premiums and other costs.

Cost Shifting

Running federal government like a company does not take something essential into account: Companies attempt to move costs onto others. When government conserves money by cutting budget plans the expenses are still there, but they are shifted onto individuals. And frequently the total expense paid by all those individuals is much greater than if federal government looked after things, due to the fact that of the rule of economy of scale as well as the governments negotiating power.

For instance, federal government can save cash by not moneying a fire department, and not having a fire inspector. Obviously, numerousa number of us will have to invest a lot of our own money to either spend for our own fire defense or risk the cost to rebuild our houses. And all of us would need to spend a lot of cash if the entirethe entire town burns down. But hey, we saved money not paying for a fire department.

What about government conserving cash by cutting down on education budgets? Not just does this hurt regional companies, however building values are greater when there are great schools close by. So the cost is moved onto the companies and people, when you run federal government like a company. Because thats what businesses do.

Shifting expenses from federal government onto the rest people actually costs us more cash than we conserveminimize taxes.

What Is Federal governments Job?

Exactly what is our federal government for? Is it to run like a company and make a profitearn a profit off of We the Peopleindividuals? Or is it a system for everybody to choose to obtain together to do things that make our lives much better?

If government cuts corners, attempts to do things on the cheap like a business, we wind up with results that cost more than we would have paid to do something right. When government saves money by moving costs onto people, economies of scale and working out power are lost and aggregate expenses increase, like exactly what has actually taken place in our health care system. And government cutting corners typically causes bad, even cruel outcomeslead to individuals lives.

Do we really wantwish to run our federal government like a company and conserve cash with smaller sized federal government, cutting corners, eating the seed corn, moving expenses onto the backs of people? Due to the fact that federal government is supposed to be about individuals lives, not revenues.

Government is supposed to be We the People making choices about how to make our lives better. Do we truly want a smaller capability to make decisions about ways to make our lives much better? Do we actually desire to cut the methods we make each others lives better?

There is frequently a great factor for those big government budget plans.


This post initially appeared at CampaignAdvocate Americas Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.