In 2002, fewer than one in four Americans were dissatisfied with the nation’s system of government and how well it works. Since then that level of discontent has been steadily increasing. Last year the number who said they were somewhat or very dissatisfied reached 65 percent.
The primary reason for our disgruntlement is the government’s record of failure. As Peter Schuck explained in his recent book Why Government Fails So Often, ‘government failure’ is neither a political creed nor a reactionary slogan—it’s an empirical fact.
In a recent analysis paper, Chris Edwards lists five reasons why failure of the federal government is endemic:
First, federal policies rely on top-down planning and coercion. That tends to create winners and losers, which is unlike the mutually beneficial relationships of markets. It also means that federal policies are based on guesswork because there is no price system to guide decisionmaking. A further problem is that failed policies are not weeded out because they are funded by taxes, which are compulsory and not contingent on performance.
Second, the government lacks knowledge about our complex society. That ignorance is behind many unintended and harmful side effects of federal policies. While markets gather knowledge from the bottom up and are rooted in individual preferences, the government’s actions destroy knowledge and squelch diversity.
Third, legislators often act counter to the general public interest. They use debt, an opaque tax system, and other techniques to hide the full costs of programs. Furthermore, they use logrolling to pass harmful policies that do not have broad public support.
Fourth, civil servants act within a bureaucratic system that rewards inertia, not the creation of value. Various reforms over the decades have tried to fix the bureaucracy, but the incentives that generate poor performance are deeply entrenched in the executive branch.
Fifth, the federal government has grown enormous in size and scope. Each increment of spending has produced less value but rising taxpayer costs. Failure has increased as legislators have become overloaded by the vast array of programs they have created. Today’s federal budget is 100 times larger than the average state budget, and it is far too large to adequately oversee.
