Tag Archives: Efficient

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Is government more efficient than the private sector?

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When it comes to providing quality services at the lowest cost, private firms are very different from government bureaucracies. A private firm has to compete in an open marketplace where consumers are free to shop around for the best deal. So a private firm has to provide more quality at a lower price or consumers will take their business to a competitor! And the owners and employees share in the profits or losses. They have an incentive to cut costs, raise quality and lower prices. They have a stake in pleasing the customer.

But what about government? Do they have competitors that pressure them lower costs and raise quality? Do the people who run the government benefit financially if they please customers? Do employees of the government benefit if they please customers? Do customers have the freedom to buy from someone else if they are not happy with the price or quality of government services?

Consider this Washington Times story. (H/T John Stossel via ECM)

Excerpt:

An audit of the government’s legal aid program for the poor concluded Monday that the purchase of more than $188,000 worth of imported Italian stone to decorate one of the program’s office buildings in Texas was unnecessary and excessive…

The inspector general of the Legal Services Corp.(LSC) said the stone, which adorns three full stories of a newly remodeled Fort Worth office building, “appears only to be decorative in nature” and does not constitute a “reasonable and necessary” expense.

If a private firm wasted money like this, they would go out of business. The directors and employees who run private firms never waste money like this! If they did, the private firm would go out of business. But the government wastes money like this all the time. It’s not their money, after all – it’s your money. Why should they spend it wisely? What’s in it for them?

And they’re aren’t exactly accountable when they get caught wasting taxpayer money, either.

The inspector general quoted officials involved with the Texas program as defending the purchase, saying the high-end imported stone was selected for its beautiful finish and installed as a decorative flourish.

And this applies to government-run health care, too. Why should be expect government to cut health care costs when they have no incentive to be efficient? Private firms have an incentive – to keep their jobs, to be promoted, to get raises, etc. Government has no incentive to be efficient.

News

Bobby Jindal explains the right way to lower health care costs

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Bobby and Supriya Jindal
Bobby and Supriya Jindal

Governor Bobby Jindal is a wizard with health care policy!

Here he is writing in the Wall Street Journal about how to cut health care costs without rationing care:

Consumer choice guided by transparency. We need a system where individuals choose an integrated plan that adopts the best disease-management practices, as opposed to fragmented care. Pricing and outcomes data for all tests, treatments and procedures should be posted on the Internet. Portable electronic health-care records can reduce paperwork, duplication and errors, while also empowering consumers to seek the provider that best meets their needs.

Aligned consumer interests. Consumers should be financially invested in better health decisions through health-savings accounts, lower premiums and reduced cost sharing. If they seek care in cost-effective settings, comply with medical regimens, preventative care, and lifestyles that reduce the likelihood of chronic disease, they should share in the savings.

Medical lawsuit reform. The practice of defensive medicine costs an estimated $100 billion-plus each year, according to the American Academy of Orthopaedic Surgeons, which used a study by economists Daniel P. Kessler and Mark B. McClellan. No health reform is serious about reducing costs unless it reduces the costs of frivolous lawsuits.

Insurance reform. Congress should establish simple guidelines to make policies more portable, with more coverage for pre-existing conditions. Reinsurance, high-risk pools, and other mechanisms can reduce the dangers of adverse risk selection and the incentive to avoid covering the sick. Individuals should also be able to keep insurance as they change jobs or states.

Pooling for small businesses, the self-employed, and others. All consumers should have equal opportunity to buy the lowest-cost, highest-quality insurance available. Individuals should benefit from the economies of scale currently available to those working for large employers. They should be free to purchase their health coverage without tax penalty through their employer, church, union, etc.

Pay for performance, not activity. Roughly 75% of health-care spending is for the care of chronic conditions such as heart disease, cancer and diabetes—and there is little coordination of this care. We can save money and improve outcomes by using integrated networks of care with rigorous, transparent outcome measures emphasizing prevention and disease management.

Refundable tax credits. Low-income working Americans without health insurance should get help in buying private coverage through a refundable tax credit. This is preferable to building a separate, government-run health-care plan.

These are conservative solutions – they will preserve out liberty and prosperity.

Bobby Jindal is my pick for Secretary of Health and Human Services in 2012, if he isn’t elected President. So remember his name!

News

Round-up of news on Obama’s economic policies

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Tax policies that destroy traditional families

New taxes on married couples with intact families to subsidize out-of-wedlock births. (This is basically an incentive to not marry, by the way)

Hans Bader at the CEI’s blog reports: (H/T ECM)

Not content with repealing welfare reform through the job-killing stimulus package, and proposing a massive marriage penalty in the tax code, Obama and his Congressional allies are now planning to make married and widowed taxpayers subsidize benefits for which they are not eligible, such as payments to households with out-of-wedlock births. For example, they are pushing a bill that will allow even households that receive tens of thousands of dollars a year in child support to demand food stamps.

…Intact families, and widows, usually have every dollar they make considered in whether they qualify for food stamps. But under the Obama-backed proposal, unwed mothers, and divorced mothers, would not, since the child-support dollars they receive would be arbitrarily excluded.

Stop and think about what sorts of incentives this creates. What kind of man would be stupid enough to consider getting married and being a father to his own children? This is how Democrats destroy the family with tax policies, so that women with children depend on the state, and the state can in turn influence the way children are raised by getting them into day care, pre-K and government-run schools.

The goal is to prevent parents from influencing their own children with benighted traditional beliefs about traditional religion and morality. According to Democrats, that is the job of qualified public school teachers using approved teaching materials designed by experts like Kevin Jennings. And besides, the more children are raised without fathers, the more government jobs are created to deal with the fallout.

And there’s more:

The Obama-backed bill also increases the federal matching funds states receive for maximizing their collection of child support payments, giving them an incentive to artificially jack up child support obligations in order to reap federal money (as many states did in the aftermath of the 1988 Family Support Act), even if that means forcing fathers who have never missed a payment to pay much more than the actual cost of raising a child. I have previously written about how court-ordered child support payments generally exceed the actual cost of raising a child under most existing state child-support guidelines.

Democrat women that I know (single/divorced women and single/divorced mothers) are so mystified as to why men are not lining up to marry them. Maybe they should be thinking about the policies that they actually voted in favor of – they are not husband-friendly or father-friendly.

Democrat women think that they can crush the last drop of liberty and autonomy out of a man, and still expect him to love, protect and provide for women and children. Inexplicable. They want the security of the state and they don’t realize how it decreases the number of men willing to make commitments.

Home sales will require government approval

The Democrats cap-and-trade bill will require you to fix your house up to be eco-friendly, before you will be allowed to sell it. What? Global warming isn’t going to solve itself, you know…. Oh, wait!

CNSNews reports on what we can expect. (H/T Gateway Pundit)

The 1,400-page cap-and-trade legislation pushed through by House Democrats contains a new federal policy that residential, commercial, and government buildings be retrofitted to increase energy efficiency, leaving it up to the states to figure out exactly how to do that.

This means that homeowners, for example, could be required to retrofit their homes to meet federal “green” guidelines in order to sell their homes, if the cap-and-trade bill becomes law.

This is the first time since these subprime mortgage bank bailouts started that I’ve ever been happy about renting.

New Republican cap-and-trade TV ad

Here’s the new ad put out by Republicans to educate the public about the cap-and-trade bill that just passed the house. (H/T ECM)

Now that’s a great ad.

Why Democrats voted for Obama

Because they don’t know anything about economics!

The second one is from Nice Deb.