Money for nothing
The City of Minneapolis is undertaking an experiment with universal basic income (UBI), paying households $500 per month for two years, no strings attached. The program will run from the…
Taxpayers will get efficient government only to the extent that they demand it at the ballot box.
Does Minnesota’s government waste a lot of money? Minnesotans certainly believe so. The Thinking Minnesota Poll has twice asked Minnesotans to estimate the percentage of state government spending that is wasted, and the median response is around 29 percent. Of course, wasteful spending isn’t unique to our state. Minnesotans believe that other states waste quite a bit of money too, and waste at the federal level is notorious. Senator Rand Paul recently itemized $54 billion in “outlandish” U.S. government spending, which probably represents only the tip of the iceberg.
Why is government waste such a chronic problem?
Years ago, economist Milton Friedman pointed out that there are four ways you can spend money. You can spend your own money on yourself, in which case you will be attentive both to the quality of what you receive and to its cost. You can spend your own money on someone else, in which case you will be attentive to the cost and possibly less so to the quality of what is received. You can spend someone else’s money on yourself, in which case you will pay attention to the value of what you get but likely less concerned with its cost.
Or, finally, you can spend someone else’s money on a third party. In this case—which represents most government spending—the built-in incentives to be attentive to both cost and results are weak or entirely absent. This is the underlying reason why government spending tends to be wasteful.
In the end, taxpayers will get efficient government only to the extent that they demand it at the ballot box. Voters need to pay attention to how government spends taxpayers’ money. Is the state pursuing ends that are useful? Are the means being used by the state to pursue those sensibly chosen? Do the benefits conferred by state spending outweigh the costs? Is government buying goods at the most economical prices? Unless voters pay attention to these questions, government waste will continue.
American Experiment plays a valuable role in informing Minnesotans about how carefully the state’s government is spending their money.
All of which is important. But most people are not accountants, and it is easy to be overwhelmed by statistics, especially when we are talking about billions of dollars.
Which is where the Golden Turkey Award comes in. While multi-billion-dollar budgets are complex and can be hard to comprehend, most of us know foolish spending when we
see it. Like, for example, $6.9 million for an emergency morgue that was never needed and has never been used. And because most Minnesotans have to work hard, full-time for a year or longer to earn $57,000, they can easily conclude it is ridiculous to pay a celebrity chef that much to tweet twice a month. Or, similarly, to pay their neighbors $900,000 not to mow their lawns. Or, weirdest of all, to pay $1,000 for a “hands-on climate mapping workshop” where participants “create maps of their personal terrain of climate change.”
Does wasteful government spending make you mad? It should. Because only when taxpayers have had enough and mobilize to insist that Minnesota’s government treat their tax money with the respect it deserves, will anything change. And only when Minnesota’s state spending returns to a reasonable level will it be possible to reduce the state’s taxes to a level where we can compete successfully for residents and businesses.