Today, many novice politicians seem to be arguing that government should be operated like a business. There are many reasons why that's an unapt analogy.
One key one is that (thanks to the actions of those same politicians) government has no "cushion" of profits on which to base the quick shifting of assets from one priority to another. Not only is government kept on a shoestring, but politicians have built in a spending incentive: If a government agency does not spend, in one year, the amounts allocated to it in its budget, those funds return to the Treasury. An agency that does a good cost-cutting job, or deploys a new technology that brings down costs, can't benefit from such performance by carrying its savings into the next year. In business, this would be tantamount to requiring that any profits accumulated during the fiscal year and not expended by year-end must (repeat, must) be disbursed to the stockholders as dividends. Would corporate execs squeal loudly at such a draconian restriction?
Current political battles over government funding, from just keeping the government running to specific concerns like stable funding for essential agencies like the FAA and FEMA, illustrate how this all plays out to public detriment. The legislated taboo on forward planning serves the public poorly.
Related to this point: Yesterday's news of yet another sudden lurch in the fortunes of Hewlett Packard (HP), offers yet another object lesson in the differences between business and government. From Packard to Hewlett-Packard, from Borders to Goldman Sachs, businesses come and go - in or out of existence, or to and from debilitating crises - with a suddenness that has become especially familiar to us in the current Republican version of a "healthy" economy. But it begs the question: Do we really want the nation's government to be that unstable? What would be the effect on Americans, and on those stalwart, risk-averse businesses, if the MSN headline of the day was "U.S. government in default"?
Possibly HP's new CEO Meg Whitman will take the company toward spinning off some unprofitable segments of the business. I suppose "USGCO" could always sell off a cabinet department or agency: I imagine the FDA's being outsourced on contract to China, and the Defense Department sold to somebody with enough petrodollars to support its huge costs, like Iran.
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