According to Schuck, the public trust to the government has significantly decreased during the past five years. Even the younger voters under thirty tend to trust the Congress and the President less than it before. Nevertheless, the citizens do not find state or local governments untrustworthy, but only the federal government. The author states that the situation in the Congress is not the reason for this mistrust. Other processes and events have lead to the voters’ disappointment in federal government.
Compared to the 1950s, in 2011 only ten percent (vs. 76%) of the respondents agreed that they could trust the government most of the time. The government that citizens view as a failure can be either liberal or conservative – it does not influence the citizens’ perception of it. Perhaps, the government indeed performs as poorly as citizens claim? It must be noted that the author only examines the government’s performance in domestic programs. The author states that it is true, and this fact is discussed by the competitive party and media, so citizens notice the failure extremely fast and face its discussion in various forms (TV, podcasts, radio, etc.).
The legislative process, argues the author, is also dysfunctional. It was criticized by media many times, and, as the author notices, the critique rose before the government shutdown and debt limit crisis (Schuck, 2014). Moreover, democratic processes that the public meets every day in their community, city, and state, are different from the Washington democracy. As it was already stated, state and local governments still gain the trust of the citizens, while Washington’s performance cannot be compared to them in terms of its efficiency.
At last, stresses Schuck, people are not willing to accept that failures made by the government are the people’s responsibility as well. It is not only their inefficiency but also our cynicism and apathy that lead to such outcomes (Schuck, 2014). Although Schuck reviews only federal domestic programs and policy failures connected to it, he explains that government failures are structural, i.e. they are caused by political culture, mismanagement, inefficient bureaucratic system, etc. (Schuck, 2014). Political culture, states the author, does not significantly change, resulting in failing policies that target minorities. The government is not able to operate information adequately, and often this information is not credible. He examines “four other sources of ineffectiveness: (1) poor information; (2) rigidity where flexibility is needed; (3) lack of the credibility needed to secure the cooperation of other actors; and (4) mismanagement…” (Schuck, 2014, p. 161). Schuck also addresses the role of the economists who may be motivated by the public goals, but often neglect details and specifics of them. They can also ignore private goals that would have been more helpful than public ones, or intentionally or unintentionally confuse public goals with private ones and vice versa.
False forecasts that result in failed policies are also the cause of poor or discredited information the agencies receive. False information is one of the general problems of the system, points out Schuck. It is costly and not always valid. But information is a vital part of the policy, so it should not be underestimated.
At last, the problem that has been discussed for several decades is also mentioned in Schuck’s book. Bureaucracy and its inflexibility cause serious problems for policymakers, those who the policy addresses, and the government, too. Due to the inefficiency of the bureaucracy, other parts of the system also fail to function correctly. Hence the failed policies and citizens’ discontent.
Schuck does examine successful policies, but his conclusion is pessimistic. To avoid failures, the whole system needs to be transformed, and this is not going to happen soon, concludes the author.
The Limits of Irrationality as a Rationale for Regulation
In their article The Limits of Irrationality as a Rationale for Regulation Mannix and Dudley discuss how governmental programs and policies fail due to the incorrect interpretation of consumers’ behavior and its adjustment to the economic models. According to the authors, consumers’ benefits that agencies calculate are often “larger than the public benefits, and much larger than the costs that agencies ascribe to those same rules” (Mannix & Dudley, 2015, p. 704). Regulators may underestimate the cost that the consumers will experience, or they can exaggerate the benefits that the regulation will bring. Artificially low discount rates that are used in the evaluation of government expenditures do not reflect the real cost the consumers have to face (Mannix & Dudley, 2015). In the article, Mannix and Dudley (2015) examine the so-called energy paradox and conclude that the value of private benefits and costs is only known through the consumers’ choices (p. 707). Although energy saving policies consist of various components such as energy security, monopsony premium, and others, “the private value to the energy consumer” still remains to be the main focus. And here the paradox of private benefits emerges again. To resolve it, behavioral studies of consumer behavior were used. Those have shown that consumers’ behavior is not often as rational as economic models suppose it to be. As an example, the authors provide the Department of Energy’s standards that were based on the supposed consumers’ myopia regarding the energy use. President Carter’s Regulatory Analysis Review pointed out that the DOE’s analyses were unrealistic and exaggerated the real impact of mandatory standards (Mannix & Dudley, 2015). Thus, the DOE did not review the consumers’ private benefits but only suggested certain assumptions based on the consumers’ irrational behavior. Here a mistake that is often made during the policy implementation can be noticed: the higher authorities (departments or even the government) make assumptions that may be suitable for economic models but often do not reflect the reality. It does not mean that consumers’ behavior is often irrational but only implies that some models may be obsolete or just too narrow to review the problem profoundly and correctly. The authors proceed and provide another example of a bill that was intensively lobbied by the appliance industry but was found to be utterly incompetent by one of the Senators, an economist (Mannix & Dudley, 2015). These obligatory standards were proven to function against the consumers; moreover, they allowed the manufacturers charge higher prices for newer models. Thus, this policy, although its initial aim was to serve the consumers, could bring actual profit to the manufacturers. This problem was discussed in the previous paragraph where Schuck pointed out that private and public goals can often be confused, intentionally or not. Thus, government policy can be hijacked by potential private benefits of manufacturers or other companies which often leads to the general failure of the policy. It does not meet the needs of the public; hence, the public believes that it is the failure of the government that is too incompetent to implement such policies. Meanwhile, the real state of affairs shows that policies can be lobbied by private parties (quite successfully).
Long-Term Budget Outlook
The long-term budget outlook examines the future of the USA budget if the laws that govern taxes do not change during the next decades. According to the outlook, the USA can face a severe budget deficit in thirty years. In 2046 debt will possibly increase up to 141 percent and exceed the historical peak.
To understand why budget deficit rises so extensively, the authors stress the amount of expenditures the government had to face. Social Security (i.e. Medicare program) is considered to be one of the main branches that demand high expenditures from the government (Barello et al., 2016). Other programs that are supposed to cause budget deficit are Medicaid and Children’s Health Insurance Program. Other mandatory spendings, as well as discretionary spending, are supposed to remain as scheduled until the year 2026. The cause of this spending is the aging population of the USA who will remain the main targets of the programs. Since their life expectancy will most likely increase, the government’s budget will have to tolerate expenditures linked to the health care programs. Other programs that are not connected to social security or health care programs are retirement programs, the Supplemental Nutrition Assistance Program, unemployment compensation, and others. The expenditures on these programs were calculated to decline to 2.5 percent in 2026 (compared to 2.8 percent today) (Barello et al., 2016). Other events that might cause budget deficit are losses on federal insurance, catastrophes, wars, climate change, and various uncertainties that are not clearly regulated by current policies. The review of the long-term budget outlook has shown that current laws and public policies will not allow the budget avoid the deficit and future debts; the authors point out that, in case of fiscal crisis, policymakers will have to meet limited and unpleasant decisions. Thus, rising federal debt is dangerous to current and future policies that probably will not be ready to face the consequences of recent tax policies. In the future, public policy and administration will have to solve much more complicated tasks if it does not review the current laws and policies that can help avoid the rise of the federal debt.
Although scholars and practitioners are not able to prevent the catastrophe, they can explain and draw attention to the modern problems that will result in serious crises later. Policymakers need to understand the consequences of inefficient decisions and start reforming the system as soon as possible. Several solutions were suggested by Barello et al., but other scholars, including Schuck, have repeatedly pointed out the main problems that need to be solved if the government does not want to face a crisis. The system, although it has been working more or less efficiently for the past centuries, is approaching a crisis due to its own inflexibility and obsolescence. Policies are being implemented but frequently they only worsen the state of affairs. The whole structure of the institutions that rule the state needs to be transformed. An individual is able to support those policies that will lead to slow transformations in the system; moreover, development of policies that will be innovative and crisis-preventive can also be viewed as an opportunity, although they will demand knowledge and professionalism. These are the options that I consider as suitable and effective.
References
Barello, S., Niu, X., Pineles-Mark, C., Shakin, J., Demirel, D., & Kim, G. (2016). The 2016 long-term budget outlook. Web.
Mannix, B. F., & Dudley, S. E. (2015). The limits of irrationality as a rationale for regulation. Journal of Policy Analysis and Management, 34(3), 705-712.
Schuck, P. H. (2014). Why government fails so often: And how it can do better. Princeton, NJ: Princeton University Press.