Posts tagged ‘public choice theory’

Public Choice Theory and State Pensions

Good stuff from Josh Barro.  He discusses pension issues and pension accounting in depth, but this struck me as the key takeaway

Another major flaw is inherent in the very nature of pensions: They allow lawmakers to give valuable benefits to public workers (and to placate their unions) today without ever having to deal with the ugly future consequences. Handing out a wage increase, after all, generally requires coming up with a significant amount of money in this year’s budget, which can pose enormous financial (not to mention political) difficulties. Sweetening pension benefits, on the other hand, achieves much the same political end—and while it does increase a pension system’s unfunded liability, that cost is spread across pension payments that will be made for many years. In this way, legislators can please public employees now and leave it to future legislatures to clean up the mess....

Defined-benefit pension plans thus provide lawmakers with both the motive and the means to seriously abuse state finances. All over the country, state lawmakers face enormous temptation to appease government workers now, and let someone else figure out how to pay the bill in the future. At the same time, the complex accounting rules that govern defined-benefit pensions make it easy to cover up the costs of the scheme.

The only way out I see is not just a current fix (which can and often is undone in better times) but some kind of procedural fix, ala what CA Prop 13 did for property taxes, permanently binding the hands of legislators on these issues.  In addition, we really need to see the GASB adopt government pension accounting rules that parallel private standards, though I am not holding my breath on that one.  Of course the ultimate solution is to do what nearly every private company has done -- get out of the defined benefit pension business, and substitute a 401k with employer contributions and/or matching.

Public Choice Theory

I asked Don Boudreaux his opinion of the best primer on public choice theory, a topic of interest to many libertarians.  He recommended William Mitchell & Randy Simmons, Beyond Politics (1994).  I have ordered a used copy from Amazon and will give my thoughts on it once I have had a chance to peruse it.

Conservatives and Police

Radley Balko is having a back and forth with a guest blogger at Patterico over the drug war and violent crime.  Balko is always worth checking out, because while many of us bloggers may call ourselves the new media, we are mostly just a bunch of op-ed pages.  Balko is one of the few major bloggers out there doing real reporting.

One part of the discussion caught my attention:

Second, JRM leaves out the rest of my discussion of police militarization in the piece, which includes the very real, not-made-up statistic based on police department surveys done by Peter Kraska showing the number of SWAT deployments in the U.S. jumping from a few hundred per year in the 1970s to 50,000 or more per year today. Most of these SWAT deployments are to serve drug warrants. JRM can disagree, but my point is that even if these raids don't produce a single gun shot (though we know that's far from the case), that's a disturbing trend. The image of state agents dressed in black, kicking down doors, and wresting people out of bed at gunpoint in order to police nonviolent crimes just isn't one I associated with a free society (oddly enough, some prominent conservatives agree, at least when other countries do it).

Perhaps because I read this as my inbox is filled with Minuteman missives (I don't know how they got the impression I was somehow sympathetic to their cause) asking me to send a valentine to agents Compean and Ramos, but I sometimes really wonder about conservatives.

Conservatives distrust government and government bureaucrats.  Many understand public choice theory.  Many understand how faulty incentives within government can turn even good, smart people into stupid bad actors.

So I am left to wonder why conservatives feel ever so much better about the situation when the government employee is given a gun, and the unique authority to use it on the citizenry?