August 17, 2011

Within the last year there have
been two proposals to reduce the size of Pennsylvania state government. Neither
one will do anything worthwhile.

Last year, state Rep. Thomas
Caltagirone, D-127, of Reading, proposed amending the Pennsylvania Constitution
to make counties the baseline government in the state. If passed, the bill
would make the counties responsible for local land use, personnel, law
enforcement, sanitation and other areas that are now part of a municipality’s
responsibilities.

In his own words: “It would
eliminate all local governmental units, boroughs, townships and cities.”

He said there are more than
2,500 municipal governments in the state and that makes things cumbersome for
companies to do business in Pennsylvania and that it is a potential cost saving
measure.

Independent candidate Dave
Cleary, who challenged Steve Barrar last year, also took up that cause of
eliminating local government.

What both men failed to accept
— maybe — is that making the county the most local level of government would
only work to centralize government, not decentralize. Maybe they did see that
and want greater centralization, top down government that reduces the influence
of local residents.

The proposal lost last year —
as did Cleary — but the Reading Democrat who won his re-election bid in
November, said he would bring it back this session. So far that has not
happened, but there is another measure afoot that claims to reduce government,
but again, the change would be nothing more than cosmetic.

There are proposals now for
reducing the size of the state House and Senate. One of the proposals calls for
the number of House members to drop from 203 to 153, while the other proposal
wants to shrink the Senate by 20 seats, going from 50 to 30, with 121 House seats
remaining.

As with last year’s proposal,
either of the new ones would require a constitutional amendment, which means it
would have to be approved by two straight legislative sessions and pass a voter
referendum. Gov. Tom Corbett said there would be voter support.

That there would be public
support is a logical assumption considering the attitudes about government
these days. Disenchantment with the federal government filters down to the
state level.

What too many people still fail
to realize, however, is that the problem with governments is not how many
representatives or senators there are, but that government gets way too
involved in the every day choices of men and women and in deciding what
business may or may not do.

Governments should do nothing
more than protect people from those who would initiate acts of force or fraud.
For those who want to actually reduce the size and cost of state government,
let the legislature finally get on the stick and sell off the state-owned and
operated liquor stores. Let them vote to end the rights-destroying drug war on
the state level. And if they really want to reduce the cost of government to
the taxpayer, make the legislature a part-time job so that representatives and
senators would have to earn the bulk of their money in the private sector
instead of feeding off the taxpayer.

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You can almost see the panic on their faces. The
politicians, central bankers, and court economists seem to be thrashing around
like bad swimmers caught in a riptide. Despite all attempts — stimulus
spending, increased borrowing, the Fed Reserve’s low-interest-rate policy,
presidential jaw-boning — the economy refuses to recover. Unemployment remains
over 9 percent, investment is stagnant, and even the previous paltry growth is
fading. People increasingly see the government as impotent.

If it weren’t for the innocent victims, this would be
satisfyingly entertaining. After all, these are the reputed best and brightest,
who assured us they know how to fix and run an economy. Now they are at wits’
end, and they’re running out of time. The election is next year.

Had they heeded those who said no government can run an
economy but it can run one into the ground if it tries, neither they nor we
would be in this mess.

Of course the policy elite try to maintain a façade of
confidence. If government stimulus spending hasn’t worked, the “experts” say,
it’s only because government hasn’t spent enough. If you believe that, you’ll
believe anything. The government already owes about as much as the economy can
produce in a year.

Political-economic faith resists evidence. There’s always a
reason — other than government itself — for its policy failures. Those of us
who believe that markets (when allowed to work) are morally and economically
superior to bureaucracies are called “market fundamentalists.” It is true that
when markets seem to fail, we point to the government intervention responsible.
If that is market fundamentalism, what should we call those who believe
government never fails and prescribe more government whenever it appears to do
so?

President Obama’s most ardent government-fundamentalist
supporters say that focusing on the deficit and debt is a mistake. The only
thing the president should be thinking about, they say, is jobs. That means
more government spending, along with a few tweaks of the tax code. Debt and
deficit be damned.

But haven’t our overlords already done that, with nothing
good to show for it? The ruling elite don’t appreciate such skepticism. Leave
them alone. They’ll get it right next time. They promise.

Despite what Obama, Fed Chairman Ben Bernanke, and the rest
of the ruling elite say, their policies are the poison not the antidote.
Monetary, financial, and housing policies created an unsustainable boom and set
the stage for the bust we continue to suffer. Since the bust, the Bush-Obama
policies have worked against the emergence of a vibrant economy. Instead of
getting out of the way and permitting the liquidation of policy-induced bad
investments, government has piled intervention on intervention in a foolhardy
attempt to recreate the pre-bust world. That is idiocy: The boom was a
politically generated series of economic distortions. Restoring that situation
makes no sense. Rather, the mistakes must be revealed through market
revaluation of assets, insolvent firms must be allowed to fail, and we all must
adjust to reality. Then the economy will grow. To date, the government’s
policies have been aimed at denying reality. No wonder they have failed.

“What should be done?” is the wrong question. The right question
is: What should be undone? The answer is: Lots of things. A good start would be
for the government to stop sucking scarce resources out of the private economy.
Every penny government spends — whether taxed or borrowed — is a penny taken
from potential private investment. Government spending — particularly welfare
and warfare — must be zeroed out and its borrowing must stop. That should be
accompanied by an end to all subsidies, privileges, and barriers to competitive
entry. The tax code, which aims to manipulate our economic activities as well
as raise money, must be repealed.

But, the policy elite say, if no one is investing their
money now, why would they invest if they could keep more? Investors are afraid
to move because of uncertainty about what government will do next. The policy
unknowns — sources of which include rules yet to be written for Obamacare and
Dodd-Frank — make waiting on the sidelines the smart bet. Credibly ending the
threat of government intervention would do wonders for the economy.

* Sheldon Richman is
senior fellow at The Future of Freedom Foundation (www.fff.org) and editor of
The Freeman magazine.

About Sheldon Richman

Sheldon Richman is senior fellow at The Future of Freedom Foundation (www.fff.org) and editor of The Freeman magazine.

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