More Money, More Problems

(401kcalculator.org)

(401kcalculator.org)

More money isn’t always the answer. Investors know this – a poor business idea will still fail, regardless of how much cash you throw at it. Unfortunately, this is a truth yet to be learned by many of our political leaders.

The security breach at the White House last month is a fitting example. A few weeks ago, Omar Gonzalez climbed the White House fence and ran toward the front door. Surprisingly, he was not apprehended as he dashed across the lawn. Gonzalez was able to run through the front doors of the White House (while carrying a knife) and make his way to the large East Room, typically used for celebrations and large events, before being tackled.

The incident revealed a glaring flaw in the White House security system. It’s that easy to walk in to what should be the most heavily-guarded building in the nation? Commentators quickly turned to the airwaves, and public outrage led to the resignation of Secret Service director Julia Pierson.

Clearly the security strategy of the Secret Service was flawed in a major way, but that didn’t stop some commentators from trying to argue that the intrusion was simply a result of budget cuts. Even Delegate Eleanor Holmes Norton (D-DC) argued in a congressional hearing that the breach was partly a result of the sequester.

It’s a refrain heard over and over again in Washington, usually by those on the left side of the aisle. If only we would spend more money, our 2,000 government agencies would function more effectively.

It’s a catchphrase that seems to be used in response to every political issue.

For example, Social Security is on an unsustainable path and will be running out of money to pay full benefits within the next 20 years. But according to Rep. Xavier Becerra (D-CA), “the most immediate threat to Social Security is the continued failure of Congress to provide an adequate budget.”

When the Internal Revenue Service was accused of unfairly targeting conservative groups for audits last summer, they subsequently “lost” the e-mails that would have served as evidence. Rather than reprimanding the agency, Rep. Sandy Levin (D-MI) claimed that the computer crashes “clearly demonstrate the need for government agencies to have adequate budgets to invest, upgrade and maintain information technology.”

The Veterans Affairs (VA) healthcare scandal last summer uncovered massive structural problems in the system, including long wait times and falsified records. In 2011, before the scandal, Paul Krugman said of the VA healthcare system, “It works — and suggests what it will take to solve the troubles of U.S. health care more broadly.” After the scandal, his message was unchanged. “It’s still true that Veterans Affairs provides excellent care, at low cost.”

This refusal to acknowledge root problems within government programs is dangerous. We are already spending trillions and trillions of dollars, and yet the talking points never change. If only we were to raise taxes a little bit more, bump up spending, and create one more agency, all of our problems would be solved.

There’s only one problem. It just does not work.

The Secret Service was not severely underfunded – there was just a major flaw in their protection system.

Spending more money to hire Social Security employees won’t help the program’s long-term finances or solve the sustainability problem.

The IRS didn’t pursue a political agenda or lose e-mails because they were constrained by tough budget decisions.

And even though Congress passed a bill in July increasing the VA’s funding by $16.3 billion, many experts don’t think the bill substantially addresses the failures of the system. “It keeps the same system in place, with minor steps in the right direction at an increased cost,” said Michael Tanner, a senior fellow at the Cato Institute.

Let’s stop pretending that throwing money at failing programs will solve our problems. The more we prop up mismanaged agencies, the longer these problems will persist.

If a CEO were to keep funneling money into a broken business without making any changes, he would be relieved of his position. Let’s expect the same from our political leaders.

First published on Opportunity Lives.

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