Wednesday, June 23, 2010

Hungry Hungry Hippos: Federal Funds Secured

Clockwise from top-right: Paul Kanjorski (D), Joe Sestak (D), Chris Carney (D), Charles Dent (R).

The representative hippo of the Pennsylvania 10th Congressional District, Chris Carney, has gobbled up some federal funds for his district and publicized his action in his June "District Dispatch" newsletter.

He got two grants totaling $5.4 million for improvement projects in Lycoming County--what a coincidence, that's Marino Country.

He was also instrumental in getting Geisinger hospital $16 million from a "Health Information Technology" grant in the recently-passed Healthcare bill. No wonder Geisinger's president Glenn Steele put out a radio ad half endorsing the health care bill.

The bigger issue at hand is the sort of Hungry Hungry Hippos game played by politicians like Carney when they gobble up as many federal funds as possible for their constituencies.

Now, it's true that with such a game there will be winners and losers. The districts and states that bring in the most federal funds will probably receive more in federal funds than they pay out in federal taxes, leaving residents of other states and districts to pick up the difference. In a way, a representative like Carney could be said to be loyal to his electorate when he gets its people as much federal funds as possible because if he doesn't, the money will just go to some other state or district. And, if government didn't need to take money in the first place in order to dole it out, maybe this would be a good thing. But remember, government alone cannot produce wealth; it can only redistribute it.

The real problem with bragging about the securing of federal monies is that it perpetuates more spending than would otherwise take place. This is because politicians have an incentive to raise taxes and to borrow more so there will be a bigger pot from which to draw federal funds. To return to our Hungry Hippos analogy, if there are more white balls in the middle of the arena, each hippo will naturally have the opportunity to gobble up more balls for his district. But to get more white balls in the center beforehand, there must be more taxes or borrowing. Thus, to pay for Carney's and others' hunger for federal funds (and thereby notoriety and votes), either taxes must go up, or the US must borrow money.

So, although the attainment of as much federal funds as possible may seem like a good thing for your district by itself; when examined nationally, it is quite costly: not only because the loans that service them require interest payments, or the taxes that service them produce economic dead-weight losses, but because government investment itself tends to be less efficient than private investment. It's also unfair because government officials pick winners and losers based on who's more cozyied-up with them. Furthermore, taxes make the economy (and you) worse-off in the present, and borrowing makes the US (and you) worse-off in the future.

Don't expect voters to know all this in November.

Besides bragging about pork, another fixture of Carney's campaign (a little bird told the Nothington Post) is going to be a series of vitriolic attacks on Tom Marino for his relationship with DeNaples: in other words, Carney-style politics as usual.

For voters, it will be a choice between DeNaples' pal Marino and Obama's drone, Carney. Decisions decisions.

If one considers that Obama has more power than DeNaples, then perhaps the lesser of two evils is Marino.

1 comment:

  1. Economist Steven Landsburg suggests how to stop the phenomenon this article covers in a recent book in a chapter entitled "how to fix politics." Landsburg playfully suggests that people choose congressman based on the alphabet standing of their last names instead of where they live so that elected congressman can't bring home the pork to essentially buy votes like Carney and Dent do.

    Also, the first chapter of Thomas Sowell's book "Applied Economics" covers the problem discussed in this article.