Monday, December 05, 2005
The Revenue Gatherers
The Revenue Gatherers
In operating a business in the private sector there is a focus on the dual operations of revenue generation and cost containment. This is the combination that maximizes profit. Profit being the driving force, this purpose is the guideline indicating the success or failure of one or both of these operations.
On the other hand there is the approach used by the non-profits that amplifies the reach for revenues with cost containment given a perfunctory role. Notice such organizations as the U.S. Post Office. Do you ever remember the price of stamps dropping? If there were competition for the delivery of first class mail there would be an effort to keep the price of stamps lower or equal to the competitors, Since competition is forbidden by law this concern is vaporized. So when the Post Office finds that it can no longer offer enough services or wants to modernize its operation, it gravitates to the revenue generation facet of its operation and raises the price of stamps. You see this in the rise of tuition in state universities, Amtrak ( including a request for more subsidization), hospitals and any operation that includes a reach for government payments. But you see it most obvious in the operation of the Federal Government. Time after time Congress initiates a new spending program that requires more money than anticipated ( because of the desire to upgrade technology and inflation ) and then finds that re-funding of the program becomes necessary to keep the program active. Social Security is but one example. There was no foresight that the population could shift from young able workers to a preponderance of retirees. There was no provision for the people who paid and died too early to obtain any benefits. There was only the presumption that if we need more money to keep the system alive we’ll simply raise revenue via taxes or borrowing and hope the pain for the contributors doesn’t reach the point of rebellion.
The hypocrisy of this approach becomes most evident when a private industry such as the oil industry, restricted from drilling on American soil by law and regulated to the extent that refinery construction is delayed and practically eliminated ,tries to raise revenue by higher prices. The government that practices revenue gathering to cover its poor planning denounces the oil companies for not doing more to conserve. The government wants oil companies to keep their prices low, cut their costs and develop alternative methods of energy generation but the Post Office et al. just needs to raise their rates. Why this double standard? Because nobody recognizes the difference between the nature of business and government. Politicians run on platforms that espouse the virtue of running government like a business. They speak of their business background and how they will translate this experience into running a more efficient government. This is a false hope and a dishonest promise. Government has no competitors, does not operate on a profit motive ( nor should it ), and primarily requires revenue gathering to cover its deficits.
Ideas that don’t work can be perpetuated only if they are not challenged and replaced with new ideas that conform to real situations. We see this in the “Peace Process” of the Middle East and in the continuing rise in postage stamps prices. Clinging to old notions, such as the one that government can do all and doesn’t need to have a limitation on its activities perpetuates the very real misery of wasted tax payments, rising costs of living on people with fixed incomes, higher and higher costs of education and health care and an eventual lowering of our standard of living. Government can sooth the citizen that inflation is contained but even a little inflation over time becomes a burden. Government services that cannot get the political backing for increased taxation to gather revenues must eventually reduce services or ration. This means the politically favored will get some portion of the benefit but those not in favor with the powers in government will do without that which they are paying for. These truths revealed can be ignored and obfuscated by those who want to pretend that everything will work out okay in spite of the contradictions because they have been able to be used in the past. What these pretenders ignore is the obvious trends of their policies. Social Security needs revenue gathering to survive. This is a fact that even the most evading pretender will eventually have to face. What is the solution? It’s really quite simple. Face down the pretenders with the facts. Write and speak as often and as effectively as you can and never allow the pretenders to perpetuate their myths without a well reasoned challenge. Every time you hear of a new government program ask yourself how much this program will cost in the future and where will the money come from. Look at the history of the expenditures of the government and how they have always covered their deficits. Look to the future when money must be printed in such volumes that devaluation is required and ask yourself why you didn’t think it was important enough to stand up against. Like locusts , the revenue gatherers will continue their scam as long as they can continue unopposed. They must be identified for who they are and what they are doing. Their way of “doing business” must be exposed for the sham that it is. Then and only then will we be able to see the results of the advantages of a limited government and an unlimited horizon of economic prosperity.
In operating a business in the private sector there is a focus on the dual operations of revenue generation and cost containment. This is the combination that maximizes profit. Profit being the driving force, this purpose is the guideline indicating the success or failure of one or both of these operations.
On the other hand there is the approach used by the non-profits that amplifies the reach for revenues with cost containment given a perfunctory role. Notice such organizations as the U.S. Post Office. Do you ever remember the price of stamps dropping? If there were competition for the delivery of first class mail there would be an effort to keep the price of stamps lower or equal to the competitors, Since competition is forbidden by law this concern is vaporized. So when the Post Office finds that it can no longer offer enough services or wants to modernize its operation, it gravitates to the revenue generation facet of its operation and raises the price of stamps. You see this in the rise of tuition in state universities, Amtrak ( including a request for more subsidization), hospitals and any operation that includes a reach for government payments. But you see it most obvious in the operation of the Federal Government. Time after time Congress initiates a new spending program that requires more money than anticipated ( because of the desire to upgrade technology and inflation ) and then finds that re-funding of the program becomes necessary to keep the program active. Social Security is but one example. There was no foresight that the population could shift from young able workers to a preponderance of retirees. There was no provision for the people who paid and died too early to obtain any benefits. There was only the presumption that if we need more money to keep the system alive we’ll simply raise revenue via taxes or borrowing and hope the pain for the contributors doesn’t reach the point of rebellion.
The hypocrisy of this approach becomes most evident when a private industry such as the oil industry, restricted from drilling on American soil by law and regulated to the extent that refinery construction is delayed and practically eliminated ,tries to raise revenue by higher prices. The government that practices revenue gathering to cover its poor planning denounces the oil companies for not doing more to conserve. The government wants oil companies to keep their prices low, cut their costs and develop alternative methods of energy generation but the Post Office et al. just needs to raise their rates. Why this double standard? Because nobody recognizes the difference between the nature of business and government. Politicians run on platforms that espouse the virtue of running government like a business. They speak of their business background and how they will translate this experience into running a more efficient government. This is a false hope and a dishonest promise. Government has no competitors, does not operate on a profit motive ( nor should it ), and primarily requires revenue gathering to cover its deficits.
Ideas that don’t work can be perpetuated only if they are not challenged and replaced with new ideas that conform to real situations. We see this in the “Peace Process” of the Middle East and in the continuing rise in postage stamps prices. Clinging to old notions, such as the one that government can do all and doesn’t need to have a limitation on its activities perpetuates the very real misery of wasted tax payments, rising costs of living on people with fixed incomes, higher and higher costs of education and health care and an eventual lowering of our standard of living. Government can sooth the citizen that inflation is contained but even a little inflation over time becomes a burden. Government services that cannot get the political backing for increased taxation to gather revenues must eventually reduce services or ration. This means the politically favored will get some portion of the benefit but those not in favor with the powers in government will do without that which they are paying for. These truths revealed can be ignored and obfuscated by those who want to pretend that everything will work out okay in spite of the contradictions because they have been able to be used in the past. What these pretenders ignore is the obvious trends of their policies. Social Security needs revenue gathering to survive. This is a fact that even the most evading pretender will eventually have to face. What is the solution? It’s really quite simple. Face down the pretenders with the facts. Write and speak as often and as effectively as you can and never allow the pretenders to perpetuate their myths without a well reasoned challenge. Every time you hear of a new government program ask yourself how much this program will cost in the future and where will the money come from. Look at the history of the expenditures of the government and how they have always covered their deficits. Look to the future when money must be printed in such volumes that devaluation is required and ask yourself why you didn’t think it was important enough to stand up against. Like locusts , the revenue gatherers will continue their scam as long as they can continue unopposed. They must be identified for who they are and what they are doing. Their way of “doing business” must be exposed for the sham that it is. Then and only then will we be able to see the results of the advantages of a limited government and an unlimited horizon of economic prosperity.
