Smart government, not service cuts, lead to small government!

Government budget cuts never seem to lead to smaller government. Government service levels get cut but not the amount of government required to deliver each unit of service. 


"Sometimes we stand in our own shadows and wonder why it is dark." (Zen)

The marginal bureaucracy never goes down. On the contrary, after budget cuts, the government bureaucracy often goes up as the same amount of bureaucracy now pays fewer benefits or delivers less service.



A successful business learns how lower the marginal bureaucracy as employees at all levels -- production floor to the executive suite -- create an environment of cooperation and trial & error. They ride the learning curve of experience. They learn how to work smarter. 

An unsuccessful business simply cuts employee compensation or limits product quality & service level to generate the increased profits that the experience learning curve should have generated.

"Companies are like soda; the bottlenecks are always at the top." (Peter F. Drucker)

For example, during the national fad for privatizing highways, those states which took the plunge found that the private contractors who leased their roadways simply jacked up toll rates. Heck, the states could have jacked up toll rates to achieve the financial returns they got from leasing ... without leasing. The public was sold on private contractors operating more smartly ... with innovative advancements adding profit.

In New Jersey, over the past few months, the Turnpike Authority "privatized" the toll collection so the private market can work its innovative magic to make it profitable for them. Instead, the new private contractor just slashed the employees compensation by more than half in order to make it profitable for them. No American ingenuity there! 

Privatizing highways, so far, has only brought states higher toll rates and/or lower employee compensation. That costs the states much more than they gain. 

When private contractors raise toll rates or slash employee compensation, they effectively siphon off money from state economies. Given the velocity of money for toll spending and low-income households, each 1 dollar siphoned off costs state economies an estimated 3 dollars ... taxable 3 dollars.

"Water heats slowly, then boils suddenly." (Zen)

A smart government could achieve lower marginal bureaucracy over the long term without raising rates or cutting compensation by instituting a sustained commitment not to raise rates or cut compensation and, instead to trying and trying and trying innovative ideas from all levels, starting on the floor, until they find innovative ideas that work ... smarter. Smarter government.

Let's stop the chop game. Let's get government leaders to be sculptors, not loggers.

Measure small government by the number of well-paid, well-trained, well-stocked bureaucracy units required per high-quality, high-service benefit units.

The number of bureaucracy units per benefit units should decline as the marginal cost of adding benefits or delivering the same number of benefit units can be handled by fewer and fewer bureaucracy units.

Let's apply to government the American ethos of "try and try again until you succeed" with firm walls against taking short-term actions that cost more in the long-term and do nothing to apply new technologies or make government brains use ingenuity.

By Steven J. Reichenstein