Facing Facts: Government is Still Less Efficient, More Incompetent Than the Private Sector

President Ronald Reagan put accomplished industrialist and real estate developer Peter Grace in charge of a comprehensive analysis of government waste.

In 1984, the Grace Commission reported that the General Services Administration, which manages all government-owned real estate and land, employed 17 times more people and spent 14 times as much on overhead as a typical private sector company managing comparable properties. In the 26 years since, there’s been no improvement.

All these years later, we still have the massive, entrenched incompetence and corruption throughout the federal government which sanctions over-spending on everything including wages compared to what the private sector would pay for the same goods, services, personnel and pensions.

In private industry, where money is real, budgets must balance, bills must be paid and counterfeiting trillions of dollars is a crime. In contrast, government service long ago ceased representing sacrifice; it’s now guarantee of royal rewards, paid for by taxing the peasants and borrowing from China.

At the state level, one-third of all pension programs are so far upside down that some future, monstrous bailout with all our tax dollars is absolutely certain, unless these governments are somehow forced to stop adding new workers and to cut the benefits provided to present retirees – probably by means testing, the same way that Social Security will inevitably be converted to welfare only for those in dire need, unless the federal government gets away with grabbing everyone’s private 401K and other private retirement funds in exchange for IOUs.

There’s every proof that governments cannot be trusted to manage money, and no proof – none, zero, nada – that they can. No matter how much of it flows to them and is extracted from us, no matter how many new taxes Obama concocts, nothing will change. Even if the government took all the money, it would still find a way to be bankrupt and bankrupt all its citizens.

Reagan at least that understood his chief enemy and enemy of the people was the idea of permitting growth in power of and confiscation by centralized government. He famously enunciated it, warning that government was not the solution to most problems but a problem in and of itself.

Our current president is on ideological, perhaps sinister, race to expand the size, power, cost and confiscatory reach of his government beyond any previous administration. He is a crazed vampire; there’s no end to his lust for the lifeblood of the economy.

The only fix is to starve this government beast, not feed it.

If it weren’t irredeemably incompetent, you might make a different argument. We give blood at the Red Cross’ blood banks because the blood actually gets to patients who need it. It isn’t all drunk by the Red Cross workers.

Yet there are countless examples of the mismanagement of government. Recently, the news media have mentioned – though made little of – a veterans’ hospital so poorly and carelessly managed that dental instruments weren’t properly sterilized, so patients – soldiers who served us – must be brought back to determine if our hospital infected them with AIDS or hepatitis. And it wasn’t all that long ago that a VA hospital right in Washington D.C. was so filthy there were roaches and rats, mold and falling ceiling panels. To this government we should hand over control of the entire health care system?

Turning to the mortgage industry, we find another example of political corruption and waste. Fannie Mae and Freddie Mac, the two largest government-run financial institutions, have long been infected with political chicanery, used to advance foolish liberal agendas, looted as if bottomless piggy banks, now made bottomless piggy banks under Obama – given unlimited access to federal funds as backstop, and are, of course, bankrupt, zombie entities. The illusion of actual enterprise very recently ended when the pair were de-listed from the stock exchange and are now free of any transparency. To the government who has wrought this we should hand over control of the entire banking and financial system?

My friends who sit on boards of regional and small community banks tell me the same thing that a recent Wall Street Journal article said: Obama’s hastily rushed through financial reform conceals deadly attack on small, independent banks with clear intent and inevitability of their demise, leaving only a few much-too-big-to-fail mega-banks effectively controlled by the government.

There are many other illustrations to consider. The fecklessness of the government has been on display in the Gulf for 70 plus days. A highly respected, much praised military leader threw himself on his sword via magazine interview to reveal the incompetence and its deadly consequences, in the fraudulent, futile policy imposed on troops in Afghanistan.

Yet, the arrogance of our royal government is revealed daily: Biden’s nasty retort to an ice cream shop owner, Pelosi’s new $19,000-a-month office, Obama’s treatment of the governor, senators and citizens of Arizona.

As the controversial Senate campaign TV commercial points out: our founders went to war – to “throw the bums out” – over a tea tax.  Look at what we are tolerant of, and by our tolerance, complicit in now.

Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 14 books. His latest, “Make ‘Em Laugh & Take Their Money: A Few Thoughts on Using Humor as a Speaker or Writer or Sales Professional for Purposes of Persuasion,”  contains a selection of his BMI essays. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.

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