Dead-Weight Loss

By Jim Young

Recently, a story about the county's proposed hiring of a person who would
seek Federal grants appeared.  The cost was over $100,000.

Here, we have "government failure".  When one examines the expenditure on a
local basis, it is sound.  But, when it is looked at from the viewpoint of
the nation, it is not.  Since the total amount appropriated is unchanged,
the amount that our county receives comes out of the amounts that would have
been paid to other localities.  So the total grants are unchanged and we
have the additional expenditure of our lobbyist.  This is known to
economists as a "dead weight loss", equivalent to hiring people to dig holes
in the ground and then to refill them.  This lobbying will cause other
localities to hire their own lobbyist to take back what they have lost.
This will increase the "dead weight loss" to society.

Lobbyists are not the only form of this waste.  The special censuses that
many communities undertake have the same flaw.  While they may redirect
money, the country as a whole sees no change in grants, but an increase in
"dead weight loss" expenditures.

There is only one solution.  Each level of government should tax its
constituents to fund its activities and not to fund lower levels. Local
governments (or school districts) treat grants as free money and spend on
things that they would never do with local taxpayer money.

Let us rise up and tell our legislators that they should end all grants to 
lower levels of government and lower the taxes that fund these grants.  The
lower levels of government can decide whether to tax their constituents to
fund activities that were formerly funded by grants.

I predict that if we do this, that we will have a more efficient, lower-cost government.

This article appeared In the Northwest Herald September 23, 2005

James S. "Jim" Young is a member of the Fox Valley Libertarian Party and a former candidate. He currently resides in Crystal Lake, Illinois