Friday, January 6, 2012

How do governments make better choices ?

Policy makers need to consider the economic impact of decisions

Many government decisions are made with a complete lack of basic economic understanding. Whether at the local, state and federal government level. Government decisions are hard to make. The special interests are powerful and few people care about the details. We all can see examples for poor decisions everywhere: such as the bridge to no where in Alaska, over spending on the military, under spending on education, our in ability to save at any level (no rainy day funds) and the lack of a jobs problems during the recent recession. I am now almost a complete skeptic on our legislators making the right decisions.

What I would like to see is some basic cost benefit analysis done on our basic legislative investments. Legislators should have the tools

So what are those tools. They are a common set of data and a basic cost benefit tools for analysis(excel) and training on basic economic decision making. The conservative has some things right: the basic principles of business investment should apply to public investment as well. If an expenditure does not generate future benefits, for the public, not the legislator, in increased general happiness and well being greater than the money spent, they should think twice about spending the money.

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