Perhaps I was just at an impressionable age when GST was introduced. I remember the argument that it should apply to everything because that stopped the waste associated with people trying to get their products exempted, especially as the exemptions generally lacked consistency anyway. I've been left with a strong suspicion of government intervention where the cost of setting up the system outweighs any improvement in the fairness of the outcome.
Reading this article in the Economist about the current situation in New Orleans reinforces this preference. It reports that the US federal government:
1) made a fund available for private property developers to use to rebuild things
2) has given uneven and inadequate amounts of aid to victims of the flooding in the Road Home programme, and
3) subsidises flood insurance in areas which are below sea level.
Point 2 is the least of the worries. You'd hope that a fund which gives people hope that they can rebuild would be equitable and fast acting. Perhaps if it hadn't been set up as an ad hoc fund more thought might have gone into how it would be delivered and into making sure there would be enough to go around.
Point 3 is me being mean. I think living below sea level is stupid. It doesn't mean I think people should be banned from returning to their land, but I think they should face the full cost of that choice.
But point 1 just pisses me off. This fund was plundered by property developers and only 0.1% of it was spent in New Orleans. Jobs for the boys I think.
No wonder the Chicago school were so scathing of government administration.
Which isn't to say that I don't think the citizens of New Orleans should not have had money thrown at them with alacrity. I do. I just think something like the EQC which paid out universally based on house value would have been less spectacularly wasteful. Sadly I don't like the US's chances of setting up a comprehensive system due to the ongoing squabbles between the states and federal government. Another reason to not join the Australian federation.
Posted by carla at August 26, 2007 10:19 PM