Fixing Government: End Central Planning

Let’s say you have a chain of ice cream parlors, ten in all, sprinkled over a large metropolitan area.  You’re planning your next quarter, and so you send out a press release telling everyone in reading distance which parlors they should shop at, on which days, which flavors they should buy, etc.

Something tells me that is not the way to do it.  The ice cream flows according to where the customers decide to go.  While they do take past reports of ice cream flows under advisement when they decide to look for it, if they happen to end up a kilometer from the nearest ice cream, the ice cream will eventually move to them.

This is one of the basic tenets of modern economics: let the distributed information direct resources.  Barring cosmos-scale advancements in computing power and information gathering, we must accept that the more distributed and informed agents will achieve better results.

Why is it, then, that we still practice central planning?  Why is the tax rate fixed until it changes?  Why does Congress intervene to thwart their own wisdom in basing Medicare payments on the Sustainable Growth Rate method?

The answer is simply that although it’s recognized that central planning is ineffective at best and dangerous in most cases, it feels good.  You see, for all their brave rhetoric, congress feels vulnerable.  They worry ceaselessly about their ability to continue serving us in a broken capacity.  Likewise, businesses feel as though a dark cloud could pass and Washington could decide to legislate them into obsolescence.

So they create symbioses.  Now, they need each other, joined at the hip, and find themselves stuck when circumstances change.

Solving the burdens of central planning takes very little changing, but the hardest thing to change still must: the congressional affairs with businesses must end.

Instead of mandating a certain tax rate, and having to adjust it based on economic conditions, the tax rate should already be sensitive to the economic conditions.  Instead of passing the Medicare Sustainable Growth Rate only to keep balking to the point where now Medicare provider payments have nearly doubled since the early 1990s where they should be nearly flat, they would let the rates move with the rest of the economy.

An ocean of information, the economy abiding fixed pillars in its middle is an utterly laughable suggestion.  While man may one day be capable of such constructions, by that point the need for their creation seems absurd, and building them today only carries us to torment when they fail and send huge pieces of debris tumbling at us across the waves.

Let us raise our sails once more and be ready to trim them according to the ocean rather than expecting the ocean to accommodate us.