Wednesday, January 31, 2007

Uses of Tax Dollars

As much as I try not to read anything in the Waco Tribune Herald, I usually read the Letters to the Editor. One letter caught my eye this morning:

Teachers need boost
Carolyn Vardeman is right [Letters, Jan. 20]. The Teachers Retirement System needs a big boost from legislators for a cost-of-living increase.
Health insurance premiums and the basic cost of living are going up. Meanwhile, legislators use tax dollars for less important things.

The last sentence is what interests me. One person's less important thing is another's prized cause or desire. Hence one of the problems with government spending and the difficulty in reducing it. While this person finds subsidizing the teacher retirement pension system a worthwhile cause, I find it less than ideal and would much rather the legislature use the funds to increase the salaries of interim instructors in the TAMU system. Each of us has expressed our desire. Now which is more worthwhile? The rational way a politician will calculate which is more worthwhile will be how many votes he can garner from the affected parties. There are many more retired and current teachers as well as sympathizers than there are interim instructors and sympathizers, so the teachers will win the day.

Is there any economic calculation (aside from the little public choice exercise I just die) here as to which cause would benefit society more? No, just a calculation of which group will yield a greater benefit to the interested politicians in terms of support. Considerations based on this line of thinking, which is common to almost all politicians regardless of affiliation (Ron Paul might be an exception), seriously complicates the socially optimal dispersal of government funding.

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