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2009 September 19 Saturday
Governments Waste Time Rather Than Charge For Services

In recession governments cut services that would be paid by the users of those services. This is wasteful and inefficient.

California drivers can't line up to renew their licenses Friday. Wisconsin natives can't order copies of their birth certificates. Georgia consumers will have to postpone registering complaints with state watchdogs. And stranded motorists in Maryland may have to wait a little longer for highway-department help.

Across the country, cash-strapped state governments are shutting down business for a day at a time to save money. State offices are shuttered Friday in California, Maine, Maryland and Michigan. Rhode Island had planned to join them until a judge on Thursday blocked its closure plan.

People would pay good money to avoid waiting for hours at a DMV office. This is avoidable waste.

A Department of Motor Vehicles office in San Francisco, meanwhile, was packed Thursday with more than 150 people. Last summer, without furloughs, wait times rarely exceeded an hour, but with three furlough days a month, people are waiting more than two hours each day, said Maria De Guia, a motor-vehicle field representative.

If state governments outsourced license renewal, birth certificate ordering, and many other document-related tasks then there'd be no need to cut services for these tasks during an economic downturn. Users could pay a fee for the cost of document processing and the out-sourcing company would fund its employees, offices, and computers from the fees collected. State governments could add additional fees for revenue generation (i.e. taxes) if they wished.

Furloughs amount to an attempt to dodge facing long term problems.

But furloughs do little to address fiscal problems such as ballooning pension costs, and some policy watchdogs fret they are a short-term solution to what is likely to be a long-term problem.

"Many states expanded health-care funding over the last decade and are now having real trouble paying for it," said Robert B. Ward, deputy director of the Rockefeller Institute. Educational programs and economic development also ballooned, he said.

I expect due to Peak Oil that spikes in oil prices to throw the US and other Western countries back into recession repeatedly for at least the next 10 years and likely into the 2020s as well. Governments need to accept they too poor to do all the things they do today. They need to scale back and live within their diminished means.

Share |      By Randall Parker at 2009 September 19 01:01 PM  Economics Government Costs


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Comments
Mthson said at September 19, 2009 4:10 PM:

If DMV is losing money, that means it gets subsidized by other sources of taxes. Separating taxes from the specific service provided in exchange means the economy doesn't have accurate price signals for the real cost of those services, and it thus can't respond rationally.

Last summer, the economy had an accurate price signal of the increased cost of gas, so it slashed its usage of gas by finding ways to drive less etc. If we had instead passed a 'gas tax holiday' we would have removed the accurate price signal, and thus the ability of the economy to have responded rationally.

It seems like the government taxing structure is all based on the same kind of 'gas tax holiday' fallacy. How much could we boost the efficiency of our economy, and thus our GDP per capita if we removed these economic fallacies from the tax structure?

Randall Parker said at September 19, 2009 5:13 PM:

Mthson,

DMV isn't losing money. The government is trying to take more from it at inconvenience to the users of DMV.

averros said at September 19, 2009 8:35 PM:

Governments cut the services directly impacting people first as the form of backmail. "Give us more money or else!"

Have anybody actually heard of a government in financial crisis shutting down Department of Protecting Flying Turtles or any of the zillions of totally useless little bureaucratic fiefdoms?

In any case, DMV is a totally and utterly irrelevant dis-service to the citizens. It to exists collect money from people to permit the same people to excercise their constitutional right of freedom of travel. It doesn't do crap to prevent people "ineligible" to drive from driving. Instead of cutting down DMV "services" it should be abolished - together with lines, registrations, renewals, and the whole idea that using public property is a privilege.

BTW, there cannot be any price signals for government "services" simply because these "services" are not something people are using voluntarily. They are either forced to use these "services" by laws emanating from the same government (or else be imprisoned, beaten up or killed by cops) or have to use them because alternative private providers cannot compete with tax-subsidized government ventures and thus can only cater to the rich who can afford to pay twice (this is the case with schools). The absense of price signals destroys any capability for rational resource allocation - eventually leading to the collapse of the government sector as it keeps siphoning increasing amounts of resources from the private sector and wasting them on economically insane projects. This is known as economic calculation problem in socialized economy, and it has been shown (ninety years ago, by Mises) that it dooms any socialized economy to eventual collapse.

Randall Parker said at September 19, 2009 10:33 PM:

averros,

I do not recognize a right to travel for incompetent drivers who can't pass a driving test or who cause too many accidents. I don't recognize a right of problem drinkers to drive.

DMV revokes driving licenses based on accidents and DUI and other ticketed offenses. This really does save lives.

Randall Parker said at September 20, 2009 12:16 AM:

averros,

I do not recognize a right to travel for incompetent drivers who can't pass a driving test or who cause too many accidents. I don't recognize a right of problem drinkers to drive.

DMV revokes driving licenses based on accidents and DUI and other ticketed offenses. This really does save lives.

averros said at September 21, 2009 12:41 AM:

Randall - I do not recognize right of travel for idiots who can't be bothered to learn to drive well. This covers about 90% of drivers on the roads.

Your opinion about other people's skills is irrelevant as long as they didn't do you any harm, sorry.

And the whole idea that some bureacrats are fit to judge anybody's skills is a hoot. Remember - these are the same people who keep giving driving licenses to people who are blind, who are testosterone-crazed morons, and who are senile.

As for "realy does save lives" - sorry, there's no evidence for that. None. Not a tiny bit. In fact, in some more civilized countries people are actually taught how to drive when drunk or otherwise impaired - and how to recognize when not to drive when the impairment is serious enough - for whatever reason - be it intoxication, fatigue, or illness. They do have much lower road accident rates in these countries (though that may be related to better roads and lack of obsession with displacing common sense with regulations in general... never mind). Funnily, the same principle is used when teaching pilots here in US ("IMSAFE", high altitute chamber training, the whole ADM gospel) - so the air travel is actually safer than driving.

MaryJ said at September 21, 2009 8:59 AM:

If you belong to Triple A you can actually conduct a lot of your DMV business through one of their offices instead of going to the DMV. Might be the way to go if DMV gets any worse.

Randall Parker said at September 21, 2009 6:13 PM:

averros,

My opinion of other people's driving skills or sobriety is irrelevant once they've killed me.

Your position just shows the intellectual bankruptcy of libertarianism. Ignore the external costs. You place the freedom to act above the freedom to not be acted against.

Eric Johnson said at September 23, 2009 8:06 AM:

> Your opinion about other people's skills is irrelevant as long as they didn't do you any harm, sorry.

Seriously? The roads are quite dangerous, with a lifetime traffic accident death risk around 1.5% for Americans. Forty thousand deaths a year and who knows how many permanent injuries; 40% of the fatalities are alcohol related. Unless you want to get fat, use tobacco, never exercise, or drink yourself to death, there are few legal or mildly-illegal things you can do that are more dangerous than using the roads.


> As for "realy does save lives" - sorry, there's no evidence for that. None. Not a tiny bit.

Even though too little is far more common, there is such a thing as too much empiricism. Let's consider drunken driving only - it is highly likely on rational grounds alone that the program of licensure, drunkenness screening, and legal penalties cuts down on drunk driving. Since every measurement has limitations/error, it would take excellent data to convince me otherwise.


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