Why Government Cannot Solve Our Problems

In business as in goverment, real decision-making almost always involves the evaluation of trade-offs and less than optimal solutions.  Do I want to spend my Christmas bonus fixing my car or vacationing in Florida?  Should we use the tax revenue repaving the roads or buying new textbooks for the school?  You can’t have everything… It’s always about making a resource allocation decision, and the resource is not always money.  Often it is the limited time available (even billionaires have a limited amount of time on earth).

There have been calls to “help us improve Obamacare”… Unfortunately, this is similar to the call to “rearrange the deck chairs on the Titanic” as the ship is sinking.  It may look nice for a very brief period of time, but it’s not going to change the end-result.

Fundamentally, Obamacare and “job creation” are founded on two fallacious principles — centralized planning can choose what is best for individuals.  By taxing and regulating our lives, government can skew the perceived value of goods and services.  However, centralized planners cannot invoke wealth creation.

As Allen Sanderson sarcastically suggested in a recent article about a way to use government stimulus to create jobs:

… pay 100,000 people salaries of $50,000 a year to dig holes in the ground every morning and another 100,000 folks  $50,000 annually to fill up those holes in the afternoons. That’s also $10 billion in spending—and 200,000 new jobs created…

It’s hard to object to  feel-good terms like “infrastructure” or “green” initiatives, but in a world of scarcity and choice, some spending is likely to be more beneficial…

The familiar political refrain on both sides of the aisle of “jobs, jobs, jobs” is misleading, disingenuous, hollow, and likely injurious to the long-run health of the nation.

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