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DOGE Needs to Consider the Welfare Cost of Taxation

by Issues & Insights
December 13, 2024
in Aggregated, Opinions
DOGE Needs To Consider The Welfare Cost Of Taxation
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Since shortly after Donald Trump’s recent reelection to the presidency, a great deal of attention has been focused on Elon Musk and Vivek Ramaswamy’s Department of Government Efficiency (DOGE), which has inspired hope in some and fear from of those “targeted” that those hopes would come true.

Many of those who feel their self-interest is threatened by a search to eliminate excess costs of government have treated DOGE as if it was a historically unique effort (which helps them characterize it as “untried” and “outside the mainstream”). But there have actually been many such efforts, as Bob Maistros has recently laid out, but they have not been notably successful in achieved their lofty goals. A major reason is the standard political reaction.

Defenders of every spending program insist that theirs is exceptionally deserving and must be spared. Some will even claim that far more of their favorite spending is necessary, not far less. The extent of their claims makes me think DOGE actually stands for “dozens of gross exaggerations” made in response. Their common theme is that every possible funding reduction they face is unfair and unjustified, and it is not long before those claims are backed by threats that the most valuable services (rather than the least valuable ones) would be decimated under the control of the bureaucrats in charge, often referred to as the Washington Monument strategy.

In large part, that concentrated opposition to reining in insufficiently effective government programs is because every government spending initiative creates an interest group of beneficiaries and program functionaries, regardless of whether the services provided to citizens justify the costs. That is why Milton Freedman once suggested that the most reliable way to stop such programs was in their cribs, before those interest groups were formed.

DOGE-type efforts must combat such a bias toward growing government. But there is a powerful logical tool to reinforce such efforts, but which is all too commonly overlooked. It is the recognition that not only is it necessary for citizens to get at least a dollar of value from every dollar the government spends to advance the general welfare referred to in the Preamble to the Constitution (sometimes referred to as an ideal but seldom demonstrated as a reality), it is necessary that each dollar spent must create far more than a dollar of value to citizens, for the simple reason that every dollar of government spending costs Americans far more than a dollar. […]

— Read More: issuesinsights.com

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