Economic advisors who advocate Keynesian policies must convince voters and taxpayers that more government spending will stimulate economic recovery. Since many government spending programs just divert resources from one activity to another, it would be helpful if advisors advocating a bigger government sector could point to programs that work, i.e. where the benefits exceed the real opportunity costs. Although it is difficult to identify and accurately measure all of the benefits to many government programs, when voters and taxpayers see obvious waste and inefficiency it is harder to make the case for more government spending.
Like many residents of Northern Virginia I observe the inefficiency of the Washington DC public transportation system on a daily basis. I have boarded the morning train at Rosslyn during rush hour hundreds of times over the past two years. Orange line trains arrive from the west, Blue line trains arrive from the south, and either train takes riders downtown. Ask anyone at the Rosslyn station on a weekday morning and they will tell you the same thing: Orange line trains are predictably over-crowded and often it is impossible to board due to a lack of space. Blue line trains always have space and often one can find a seat.
Clearly there aren’t enough Orange trains running in the morning relative to Blue trains. This is inefficient. Transportation costs can’t be minimized if there are predictably fewer passengers per train on Blue lines than Orange lines during rush hour. This should be obvious to management at the Washington Metropolitan Area Transit Authority (WMATA). Although reallocating trains may represent a small cost saving there is no reason to remain inefficient. The fare changes (it costs $1 more for a paper ticket) have shifted nearly all rush hour commuters to a plastic Smart Card that tracks movements throughout the WMATA system. If taxpayers can’t trust the government to run operations like WMATA efficiently, the case for more government spending is much less convincing.
The inefficiency at WMATA is seen in many other government agencies and in many public institutions. The next time public college university administrators complain about the shortage of classroom space and advocate for more infrastructure spending they should be required to show how efficiently classroom space is currently being used. On most college campuses classrooms are less utilized early and late in the day, and on Monday-Wednesday-Friday relative to Tuesday-Thursday (let alone when comparing summer to the traditional school year). Colleges and universities should use their current physical plant efficiently before taxpayers are required to spend for more space.
The big debate in this fall’s Presidential election will be over the proper size and scope of government. Regardless of the outcome of that debate, politicians and bureaucrats should be held responsible for waste and inefficiency in spending programs. There is no doubt that we can’t fix our fiscal problems just by reducing waste and inefficiency in government. But wasteful government spending diverts resources from more productive uses and will not help an economic recovery, regardless of what some advocates might say.