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Wednesday, February 17, 2010

Stimulating Ohio

The Columbus Dispatch asks whether the stimulus was good for Ohio. It seems that some jobs probably were saved. But they weren't the kind of jobs that are most beneficial to the economy. The single two largest dollar amounts awarded in the state went to Medicaid and government agencies, of course. These alone make up half of the total pie.

So there were indeed lots of government jobs that were saved. In other words, the most inefficient ones in our economy. These are not the kind of jobs that would exist in a voluntary society. People who normally provide services would be required to do so at a cost that is acceptable to consumers. Otherwise, they would go out of business. New providers, who are better able to meet these needs, would then take their place.

Government is not accountable in this way. State agencies (and state protected "private" monopolies) will get money regardless of how they perform. This makes it impossible to tell if they are really meeting consumer demands. On top of that, when they are widely perceived to give bad service, this will be used as an excuse to throw even more taxpayer money down the rat-hole.

Some regime apologists would claim that government must step in where industries are a "natural monopoly". Ultimately, this is just a myth that providers take advantage of. This allows them take the most possible taxpayer money from their unwilling customers, while providing the worst service they can get away with.

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