NOTE: This is aggregate return on investment, not individual program. So maybe it's ok if this program has negative ROI if the total government investment portfolio has a high return - kind of like VCs that lose money on 9/10 investments but make it back and more on that 1/10. I would argue though that it's very unclear if the overall portfolio for the government is positive...rising debt suggests it is not.
Unfortunately government accounting can't work that way, because you're not dealing with a single organizational hierarchy dispensing funding and mandates simultaneously. At minimum, you're dealing with state and federal in parallel, and usually local/municipal, interests, all of which usually have significant discrepancies between the org chart, jurisdictional divisions, notional organizational remits, and the funding flows.
When we look at the effectiveness of government programs, then, we have to bear in mind that there usually isn't a single monophyletic organization assigned a specific amount of money to do whatever falls under a single conceptual umbrella. This is most egregiously the case when people ask how we could spend $X on one thing but not even $Y<<X on another -- while it's informative, there was probably never a point at which the two things were individually competing for funding, so it's not necessarily an indicator of priority. Similarly, when we ask if we're supporting something most effectively, it's usually not correct to assume that we can get the same dollars put into arbitrary programs with equivalent efficiency, or that the organization had access to the better option we're proposing.
All of the above is just to give context to the larger problem with government profitability: the government is supposed to do unprofitable things, because if they could be done like we want and turn a demonstrable profit, we could (theoretically) have for-profit corporations do them. It's hard to get corporations behind things like entitlements where the outgoing cost is a gigantic question mark, or things like education and blue-sky research that might pay off decades from now. Nor do you want things like the firefighters in your community answerable to a normal cost-benefit analysis, because that's how you get fires prioritized by expense. In this, the government has a terrific advantage as regards its debt: unlike people, governments aren't supposed to die, so their debt doesn't have a big actuarial timer on it before it becomes worthless. Their debt behaves more like stock, in some ways.
In any event, the point is this: determining value for money is really hard with government because it's a complicated mishmash of operational units working on deliberately unprofitable things in different ways and with different operational boundaries, so both the alternatives available and the ultimate accountability for a particular budgetary decision are nontrivial to determine. When we say things like "that $700 million could have bought [X things I think are important]" because the cost of the X things is $700 million, that's not necessarily true.
Author
Topic: AmeriPol thread (Read 4462905 times)