The wisdom of Garett Jones, a continuing series

by on January 26, 2010 at 5:22 pm in Economics, Political Science | Permalink

The key to controlling spending is permitting more earmarks (sic).

The link to his tweet is here.  Can you guess at Garett's underlying model?

1 mk January 26, 2010 at 5:30 pm

Let politicians bribe their constituents into dull complacency, setting them free to make tough decisions?

2 Andrew January 26, 2010 at 5:37 pm

A. Competition for money will make Congressmen more competitive (less cooperative).
B. Voters will be highly critical if there is transparency (see A) and voters will enforce general welfare.
C. We will see a lot of out-of-state campaign donations (see B).

It’s interesting, but it seems like earmarks are often rewards for votes for passing spending programs. So, earmarks may participate in the big spending far beyond their nominal values and contributing to a tragedy-of-the-commons-effect in spending control. On the other hand, I heard Peter Drucker said that costs can’t be controlled, they have to be cut, so maybe earmarks can be used to bribe people to cut programs to offset the perceived loss of benefits.

3 mk January 26, 2010 at 6:43 pm

A more fleshed out version:

Bribe the 5-10 marginal senators with exorbitant earmarks that far outstrip the within-state spending cuts.
Of course, every senator will now want to get bribed.
That makes it more expensive but on the other hand maybe all senators are in “perfect competition” to sell their vote.
If you assume (big assumption) that constituents only care about the raw within-state dollar impact of a spending bill, then under perfect competition the equilibrium is: give back slightly more than 60% of spending cuts via earmarks, to buy the 60 necessary votes.

Of course this model needs to account for the fact that there are 2 senators from every state, as well as a whole host of simplifying assumptions that were made. But as simple heuristic models go it might not be terrible.

The biggest problem with this model is precisely what makes it counterintuitive: the fact that everybody (specifically, the voters) thinks earmarks suck.

4 Billy January 26, 2010 at 7:00 pm

Usually, an earmark means politicians will spend only the earmarked amount on a particular project. So, I guess if you earmark everything you limit spending on everything.

5 Dewb January 26, 2010 at 7:22 pm

Earmarks drive voter anger out of proportion to their actual slice of the budget pie. So, more earmarks means Congress must keep the rest of the budget modest if they to want to preserve their personal projects.

6 steve January 26, 2010 at 7:48 pm

Athletes foot is caused by the Jews. Can you guess my underlying model?

7 Chris January 26, 2010 at 8:44 pm

Assume that legislators need to vote to spend a certain amount of money each year to satisfy their constituents.

Earmarks tend to be one-time payments where as regulation and legislation tend to be recurring spending.

Therefore, if they can meet demand for payments through earmarks spending remains flat but with new legislation it increases year over year.

8 Andrew Berman January 26, 2010 at 11:00 pm

Restating Leigh’s post in a more cynical way: the average representative is quite willing to add a billion dollars to the deficit in order to get 10 million dollars for his or her own district. Allowing more earmarks would limit the overspending.

9 E. Barandiaran January 27, 2010 at 7:26 am

Although I like Steve’s comment very much, I’d have been surprised if someone had been able to outline a model supporting G. Jones’ exciting statement. Actually, I think there is no model of rational behavior that can support it. Please Tyler, ask Garett to outline it so we can have a serious discussion about relevant assumptions in economics and in particular in public choice theory.

10 anon January 27, 2010 at 8:25 am

Athletes foot is caused by the Jews. Can you guess my underlying model?

Quick and dirty research?

Oh, wait!

11 Trevor January 27, 2010 at 8:34 am

Law of demand: price goes up, quantity demanded will go down.

Make government more expensive to consume, and we consume less government.

12 ahappinessexperiment January 27, 2010 at 12:45 pm

Fill their bellies with candy and they will have no appetite left for steak.

13 Str8er February 28, 2011 at 9:35 am

I think that if we don’t rush in to things we might act with a bit of wisdom.Because you can find many things with acceptable prices if you just look for them.

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