Do you think that government spending is inherently waste prone, if not necessarily wasteful?

Question

Can wasteful spending also be simulative? Do the same considerations and the same responses apply to corporate spending? How does one measure waste?

Answer 1

Wasteful depends on your POV. If you mean that government generally spends more to get a job done vs. a competitive market, then most would say that this is the case. On the other hand government cares more about positive externalities and do not suffer from market failure (for example is a monopolistic company in any way less wasteful than a government department?)

A modern practical example would be to compare the British government provided health services against the American market model. Broad measures show that both countries have the same overall level of health but a Nationalised British system costs 3 times less than the American system. Proponents of the American system would point out that healthcare in the USA is often the best in the world for people with good insurance and this is allocating resources as people want it spent. Supporters of the British system would say that a nationalised system has a significantly lower cost due to not having to administer payments and lack of co-payments prevents market cruelties (see Michael Moores, Sicko film). They would also say that while America has good health care for some a significant majority are exposed to 3rd world quality care due to lack of insurance money.

The same kind of arguments could be made in many sectors such as university level education. The expensive American private system (2.5% gdp vs more like 1.2% elsewhere) with a lot of world class unis but massive decrease in American social mobility impacting the generally efficiency of the economy. Why should the intelligent hard working but poor American have to get low wages and be under utilised in the army? Why should I pay for all those children’s education when I have no kids myself?

In general it comes down to if market failures are so great that they remove the competitive markets general cheapness at getting things done. This argument has raged thought out the history economics even from the original Libertarians such as J.S. Mill, Adam Smith.

A side argument put forward by more modern market critics is that people turn a blind eye to commercial waste (large executive pay packets, monopolies etc) but are critical of wastage of public expenditure due to an inherent distrust of taxation, especially amongst Americans.

Answer 2

Government spending is not inherently waste prone. Some government spending has been totally profitable to the country. Consider some of the WPA projects of the New Deal under Franklin Roosevelt. During the Great Depression they gave welcome and needed employment to hundreds of thousands of people and their spending helped the private sector to recover. Many of the projects built then continue to return very profitable dividends to the country's economy today. To name only a few: The TVA continues to provide electricity to the South--whole industries, whole cities, would not exist there without it. The same for power from the Hoover Dam in the Southwest and the Grand Coulee Project in the Pacific Northwest. Where would the country be without the Interstate Highways? Government sponsored research for agriculture helped produce modern American agriculture, the most productive and profitable in the world--among our most important and profitable exports. Scientific research has made whole technological industries possible. Medical research has benefitted the human race and had very positive economic effects as well. Yet the most profitable investment in history turns out to have been the Veterans' Bill Of Rights, offering college educations to returning veterans of World War Two--it raised the earning ability of literally millions of people. No matter what it cost, its payoff was vastly more in terms of tens of millions of people trained and qualified for jobs that earned them many times what they would have earned otherwise.

There will always be some waste. There will always be some overhead. That is unavoidable, and it happens in private industry as well. This is a case where we should not "throw the baby out with the bath water."

Answer 3

Waste is money that may not used for the point that it replaced into meant. whilst Barack Obama admitted that a million/3 of the $787 Billion "stimulus" equipment replaced into waste or fraud, he's saying that the money did not decide for this is meant use. enable's say he ear-marked $a hundred Million for potholes and $eighty Million replaced into for "administrative expenses". this is $eighty interior the waste and fraud categoy. The fraud is human beings dipping their palms into the pot who would desire to. The waste doing issues like the GSA did and plan a great, lavish trip to Las Vegas. this is not technically fraud in that they don't look to be going to penal complex, however the money did not visit what it replaced into meant for. this is only stimulative in case you're a crackhead Keynesian. firms do not waste money. they convey wealth. If an enterprise wanted to spend $a hundred Million on some thing or perhaps $a million Million of it replaced into wasted, human beings may be fired. If an enterprise "wastes" money, they go bankrupt and don't exist to any extent further. they'd't only scouse borrow taxpayer money to make up for his or her undesirable judgements.