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LISTEN NOWThe Freedom Files Podcast Episode 51: Clara del VillarListen Here

Issue Analysis

Failing More Expensively or Succeeding with Less

Some voices support any sort of domestic government as long as it’s bigger—sometimes so much so that they will believe that any facts available confirm their case. In his Sunday column in The Times Online, Charles Blow posts a chart that paints a familiar portrait to leftists: he points out that Americans perform worse in school, have higher unemployment and have a lower life-expectancy than their contemporaries in the developed world.

The answer, he implies, is more spending, or, as he puts it—echoing the message of President Obama’s State of the Union Address—“we can’t win the future by ceding the present and romanticizing the past.” But there is an alternative narrative; one that leads us to conclude that there may not be much the government can do to improve these conditions, but what the government is already doing isn’t helping.

As of 2007, government agencies in the United States were already spending, as a percentage of the GDP, more than the governments of Canada and Switzerland , but this was not reflected in life expectancies. In 2003, the United States ranked 45th  in the world for public expenditures on education as a percentage of the GDP; by the same measure, Singapore and Japan ranked 120th and 125th  respectively, but this did not mean American students to performed better in mathematics; and, during the height of the economic crisis, no government spent more than that of the United States in a Keynesian attempt to keep unemployment at 8% or below (it’s 9% now). But the United Kingdom  and Germany, which introduced severe budget cuts, have much lower unemployment rates.

The same pattern can be seen in America’s laboratories of democracy: Idaho spends less than half as much per pupil as Washington, D.C. , but gets significantly better results on standardized tests.

Just because spending more money will not correct failing state agencies does not mean that spending less money will. Students in Idaho score higher in spite of the state spending less, but not because the state spends less. A growing deficit--rather than the failure of our government institutions--dictates the need to cut spending.

But the examples of foreign governments and state governments demonstrates that it is possible to do more with less. This comes through the initiatives of policy entrepreneurs, such as the current initiative to provide parents in Pennsylvania with vouchers; a plan which is not only fiscally responsible but also likely to lead to important advances in America’s broken public school system. Though the aim of budget cuts is to save money, these cuts also give policy entrepreneurs the opportunity to reform old systems and find better ways for providing necessary services. This is a benefit with which the instinct to fail more expensively cannot compete.