Advantages of Downsizing in Federal Government
The federal government needs to be downsized because it is running on huge budget deficits, spending a lot and heading towards financial crisis. By 2015, spending on Medicare, Medicaid and Social security is expected to increase from $1 trillion (2005) to 2 trillion. It is not yet known where this money will come from and unless the government cuts down on its spending, working families will be forced to incur high tax increases that will outdo and dwarf anything they have experienced in the past.
There are different aspects that encourage downsizing in the federal government such as the fact that the costs of operation are very high and the federal government has programs which are proving to be heavy burdens for the tax payer to handle. Downsizing comes with numerous advantages some of which are as highlighted below:
- Federal spending leads to transfer of resources from private sectors that are productive to those that are less productive. A large portion of federal spending is in benefits payments and subsidies two areas that are the least productive in enhancing the economy. By downsizing, the economy will receive a boost.
- The spending of federal governments increases pressure on taxes not only at present but in the future as well. High taxes lead to reduced incentives for activities like saving, starting a business, investing or working. High taxes also mean that incentives will increase to indulge in activities that are not productive such as evading payment of taxes. By downsizing the spending of federal government, this possibility will be reduced or eliminated.
- Majority of the federal programs are geared to benefit specific interest groups while they harm the interests of the public at large. This is not democracy and the only way to solve this is by downsizing the federal government.
- Federal spending tends to be wasteful and its programs are mismanaged. This leads to abuse, cost overruns, fraud and other kinds of bureaucratic failures. While this also occurs in the private sector, they are often weeded out and the same can be done within the federal government by downsizing it.
- Expansion of federal government into local, private and state activities has distracted I t from its constitutional duties as such by downsizing it, it will have less activities and this will increase its performance tenfold.
- The number of retirees is expected to rise increasing the generation of baby boomers and this could trigger political and economic death. By downsizing the federal government more will be saved and this can be directed to more rewarding ventures.
There is no doubt that downsizing in the federal government is essential towards boosting the economy and reducing the level of resource wastage that is currently been witnessed.
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