Recent columns have explored two persistent myths surrounding the debate over federal spending and taxes, in other words, over how to avoid going over the fiscal cliff.
To recap, Republicans may have a majority in the U.S. House, but they don’t have an anti-tax mandate. That’s because more votes, in total, went to Democratic House candidates. Gerrymandering gave the GOP its advantage.
Second, raising taxes on those earning more than $250,000 a year won’t crush the “job creators.” That’s because 97 percent of them make less than that and because businesses respond much more to demand than tax policy.
Now it’s time to tackle a third myth, that government should be run like a business.
This has become such a staple of political discourse, mainly among Republicans, that it’s almost never challenged. The underlying assumption is that running government like a business would result in greater efficiency, driving down spending and taxation.
There is no question government agencies, at all levels, should be run in a more businesslike fashion.
They should invest in technology, especially computers, share back-office functions such as finance and personnel, and even merge completely, slashing administrative overhead.
Let’s face it, it costs a lot of money for Summit County to have 17 school districts.
Also, certain government services, such as garbage collection, can be turned over to private operators. Still, they are under government oversight.
But what about the core of the argument? Can government really be operated like a business?
The answer is: No.
The biggest reason is that, if you are in the business of making widgets and the bottom drops out of the market, you can decide to stop making widgets and either close the plant or retool the line to make something else.
Governments can’t do that. They must continue to provide basic services such as defense, health care and education, even when times get tough. In fact, difficult economic times decrease tax revenues at just the time when demand for many services spikes.
Governments must also take the long view, investing directly or indirectly in social goods that pay out, so to speak, over time frames and in ways that the marketplace doesn’t value or doesn’t value adequately.
Clean air and water are good examples; so are investing in basic scientific and medical research.
Businesses must balance their budgets, the argument goes. But at the federal level, running a temporary deficit when the economy is in decline provides essential services and protects against a total crash by stimulating demand when nobody else can. The federal budget can be brought into balance later.
Businesses also have well-defined, hierarchical power structures; everybody knows who the boss is.
But in our democratic republic, power is spread among three branches of government and three levels, federal, state and local. There are many bosses, and they change frequently. Voters resist mergers and consolidations, even when shown that they can save money and improve service levels.
Governments can, of course, do a better job planning. But their best-laid plans, focused with precision and including measures for the desired results, can be upended quickly by an election that brings in a new set of leaders with a new set of priorities.
Complicating matters further is that voters send mixed messages. In terms of the fiscal cliff negotiations, they want low taxes, a strong defense and a continuation of social programs.
Finally, those who advocate running government like a business fail to confront the many inefficiencies and financial catastrophes that exist in the private sector, pointing only to the success stories.
The profit motive, the rationale for all business decisions, sometimes produces horrible decisions that end up causing a lot of economic and social damage.
Yet Republicans and some Democrats continue to offer the “run government like a business” solution to the nation’s fiscal difficulties, and many voters eagerly embrace the option, as it involves neither the pain of higher taxes nor the pinch of spending cuts.
In the final analysis, the argument is little more than sloganeering, pandering to the worst instincts of voters instead of educating them about real choices and offering leadership in a clear direction.
Hoffman is a Beacon Journal editorial writer. He can be reached at 330-996-3740 or emailed at email@example.com.