Friday, September 11, 2009

The Government Machine (Part 1)

In an effort to identify where my own thoughts of the government's ability to successfully operate programs differed from the norm, I asked for some help from my friends.  I wanted to know what federal government programs they thought were well-run, efficient, and to the benefit of the common good.  Some I were expecting and some caught me off guard.  Below is my analysis of each program or office mentioned to me prior to publishing this article.  Since I got a lot of good feedback, I'm going to break this into multiple pieces.

The National School Lunch Program
The NSLP was officially enacted with the passage of the Richard B. Russell National School Lunch Act under President Harry S. Truman in 1946.  This program evolved out of the common problem that a lot of politicians have: the desire to remain in office over the desire for a prosperous country.  People were looking for help from rough times, so the politicians sought to make them happy with promises of free lunch.  I won't dwell on the development of the program because it is a rather convoluted story.  Sufficed to say that the programs leading up to the current NSLP involved price fixing and legislative language to punish schools that did not choose to participate in the program.

The program today offers free or reduced price meals to qualified individuals and qualified public, nonprofit, and residential educational agencies.  Sounds like a great program to get behind - it appeals to all of your moral values and beliefs.  Did you ever stop to think about the problems with this program?  First off, all meals prepared at an institution receiving NSLP must adhere to FDA guidelines (be sure to check the next post which will include the FDA).  Secondly, the government is using farm subsidies to provide fixed-priced goods.  What is wrong with farm subsidies, you ask?  Do you know where high fructose corn syrup comes from?  When the US sugar farmers couldn't keep up with foreign competition, US Farm Subsidies effectively increased the price of all foreign sugar imports so the US sugar farmers wouldn't lose their market share.  Then when other sweetened products (like coke) were competing to get their prices down, HFCS stepped in to become the new low-cost sweetener made by the US corn farmers (under another subsidy program).  Price fixing also has another impact that isn't always apparent: stifled competition.  In a free market, someone comes out with a good or service and prices it to make a profit.  The price is basically determined by supply and demand: the higher the demand, the higher the price.  Someone else sees the product and the selling prices, decides that they can make it in a way that selling it for less would still turn a profit, and enters the market at the lower price.  At this point, each manufacturer is trying to get the price down or increase the value of their product through development and marketing.  When the government is involved, not only does a competitor have to beat the government price, but it also has to beat the taxes taken away from people in order to be competitive.  Additionally, there are usually stipulations tied to the purchase of government goods that would further hurt the buyer if they stopped using the government product.  The stipulation from the government in the NSLP is that if a school opts out of the program, they lose additional federal food support in the way of excess farm goods (a by-product of a different farm subsidy) and additional monetary support for unsubsidized meals.

So what could be done better with the National School Lunch Program?  I can imagine a grocery store, restaurant, or local charities teaming together to create school lunch kitchens for entire districts.  Currently, part of the NSLP restrictions is that all lunches must be made on-sight in order to qualify for aid.  Everyone knows that mass production helps reduce costs and in meal preparation, it is no different.  These large kitchens could be located such that they could deliver hot meals to several schools on a rotating basis to coincide with the school's lunch periods.  The low-cost or free meals could be covered through the cost of other student's meals - like any other business that offers discounts (when that loan company offers you 0% financing, you know they are still getting their money somewhere else).  This may not be the only solution - there may not be any one single solution.  The point is that government aid comes at a higher cost than is initially identified by any single program.

US Peace Corps
The Peace Corps was started by Executive Order under President John F Kennedy and later authorized by congress with the passage of the Peace Corps Act.  The goal is to send able-bodied Americans out into the world to help other countries with needed training, improve the image of Americans abroad, and to increase the understanding of other cultures among Americans.  Since its inception, there have been nearly 200,000 volunteers that have served 139 countries around the world with a budget of $340 Million in FY2009.  So what is the problem?  I say it doesn't do enough.  The US Government decides who deserves to be helped and who must go on suffering.  Not only this, but it is hopelessly inefficient and redundant.  Check out the International Volunteer Programs Association (only one example of many) which sets up international volunteerism through any number of different programs.  Private overseas aid was three times more than government programs.  The message here is that the government bureaucracy is slowing down our ability to help others.  Furthermore, when you donate your time and money to a private charity, you can more specifically target your donations as you wish.

Delivery of Social Security and Government Retirement Checks
I am a little relieved that Social Security and Government Retirement programs weren't targeted directly - it makes me think you have some common sense.  This is a little specific in my mind.  Distribution of mailers is an automated system (most likely developed by the private sector, I might add) and should be efficient.  Now try fixing a problem that may occur with the delivery of your check - THAT takes forever.  I'll also cover the actual delivery of items when I talk about the Post Office next time.

National Institute of Standards and Technology
This one is in response to a comment that the service (the government service that keeps everyone's clock synchronized).  I have chosen to cover all of NIST in this section because is only a very small part its mission.  NIST is responsible for determining industry standards, validating new measurement standards, and pushing new technology.  As with the Peace Corps, NIST is disconnected from industry and redundant.  Currently the most widely used set of standards in industry is organized through an international organization called the International Organization for Standards (ISO).  ISO has member companies in 158 countries around the world and as such is the largest international standards organization.  Standards set by this organization are agreed upon though agreements by technical experts in their field.  Industry has always been the most successful at pushing technology, so the ISO standards are also the most up-to-date and relevant to their fields.  ISO isn't the only standards organization, either - nearly every professional society has a list of standards such as ASME and IEEE (ex: IEEE 802.11 - more commonly referred to as wi-fi).

Be sure to tune in next time for a look at the Food and Drug Administration, The Department of Defense's Global Positioning System, the Postal Service, and most people's golden egg: The US Highway Department.

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