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EXCERPT: (Get full testimony in Word format)
The notion that people make better decisions when they are accurately informed is a well-established principle of public policy. We have laws against deception, some of which I helped to enforce during the Reagan Administration (as chairman of the Federal Trade Commission, 1981-1985). The public’s outrage over the Enron debacle is driven in major part over the lack of truthfulness and candor about what was going on. Likewise, campaign finance reform is supported, at least in part, because many believe that reporting is slow, inaccurate, and incomplete. There’s no less need for accurate information and transparency when it comes to deliberations over ways in which the people’s representatives acquire command over individual citizens’ resources for public use.
The federal government can gain command over resources and determine their uses in four major ways. It can:
1. Tax, and then spend;
2. Borrow and spend;
3. Simply spend (“print money”); and
The process of decision-making under the first two methods consists of extensive deliberations based on data and analysis extraordinary in its scale and scope. While I would not agree that all decisions in these areas are the “right” ones, certainly there is no excuse for their not being informed ones. The third method is largely unused today.
The fourth method of gaining command over resources – conscription – is used, and used widely. Specifically, governments at all levels engage in regulatory actions which “conscript” resources in a real sense and force (or “channel”) them to be used in ways different than would be the case otherwise. This is neither good nor bad. As I have spent many, many years discussing and writing about, there are times when the (federal) government should step in and regulate. There are times when it does, but it should not. There are many more cases where it does, and should, regulate, but should do so in a more cost-effective manner.