Smoke and Mirrors

Having spent the past year in the legislature as a state representative, I am continuously amazed by the lack of critical analyses in government.

As an aside, I came out of the private sector and am a CPA who owned my own turnaround management practice. Our firm succeeded or failed based upon my decisions.

When government fails, citizens pay. Government is seldom accountable for its failures or its lack of planning. I have seen politicians run on a platform of fixing the very problems that they created.

The methodology used to develop governmental programs is suspect at best. Spending by the executive branch is seldom based upon results and is frequently based upon hearsay and innuendo.

For example, Social Security, which is failing, is now called an entitlement when in fact all contributions came from taxpayers and employers. Citizens with significant wealth have been made to believe that they have to justify why they should receive Social Security since they allegedly do not “need it”, an entitlement mentality. The smoke and mirrors surrounding Social Security have confused people about the nature of what they earned. Despite hoopla from government, the government is merely a trustee of the social security trust funds.

The marketing of government programs has also frequently clouded the landscape about what is real and what is not based solely upon the whim and fancy of those in office.

Common Core has been touted as the newest brainchild for improving education for all. Prior to Common Core, it was No Child Left Behind. Meanwhile, many employers and most students expressed concern about students entering the workforce who had little to no preparation for the real world. In other words, it became almost all children left behind. Smoke and mirrors!

The difficulty of both the education system and Social Security examples is that government lacks any meaningful measure of effectiveness about the effectiveness of its programs. “Feeling good” replaces actual results.

Government has no competition and has no performance standards to evaluate the efficacy of programs other than the people served and the Constitution.

Businesses and individuals are judged by the marketplace.

Businesses and individuals adapt, or they face obsolescence and potential bankruptcy. Government perpetuates itself by developing a keenly honed inability to adopt a performance measure or performance measures which may indicate that they are failing. Government can go bankrupt but a bankrupt government is merely replaced by another government.

For instance, former President Obama and former VP Joe Biden made the comment during the 2008 stock market collapse that it was fortunate that Social Security was not invested in the market. The smoke and mirrors of their argument was seldom countered even though most experts conclude that they were wrong.

In effect there is no performance measure against which Social Security is measured and therefore arguments about it are generally one-sided self-serving arguments designed to perpetuate the status quo rather than serve the people. Suboptimal decisions are forced on the most vulnerable.

The lack of critical and analytical analyses in developing political solutions to societal problems have perpetuated greater pain and unintended consequences on our society at almost every turn.

Be it the opioid crisis, the student debt crisis, autism epidemic, exploding medical costs, national obesity, global warning or virtually every government program, the root causes and potential solutions are seldom well thought out.

The need for scientific review and analyses is now more important than ever because so many government programs are in danger of failing catastrophically.

The critical risk factors facing the government of smoke and mirrors explodes in virtually every facet of our economy. Greater analytical thought is required to prevent system failures as well as systemic failures of entire segments of the economy.

To effectively combat the smoke and mirrors, every program in any government should be evaluated against the performance metric that has been analyzed and scrutinized to avoid unintended consequences. Those metrics should be incorporated into any major piece of legislation that is passed.

An Auditor General, Office of Inspector General or Office of Management and Budget at the federal level, should be the independent agency that reviews for the legislature and the executive branch the viability of the programs implemented.

Any agency or program which fails this performance metric system must be subject to review. This review and resulting recommendations for improvement would then be subject to legislative correction.

This concept appears simplistic but I believe it is part of the reason why the Founding Fathers significantly limited what government would be involved in. As our government expanded its reach, the difficulty of determining whether or not such expansion was effective or not was lost.

Our nation has severe problems. They can be solved. The smoke and mirrors used by government to justify its own existence threatens our existence. Without meaningful systems of controls on the programs will likely lead to disaster and great harm to citizens due to the unintended consequences of a governmental program run amok.

Frank Ryan, CPA, USMCR (Ret) represents the 101st District in the PA House of Representatives. He is a retired Marine Reserve Colonel, a CPA and specializes in corporate restructuring. He has served on numerous boards of publicly traded and non-profit organizations. He can be reached at [email protected].