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#1 2017-03-02 07:56:21

mmm....shiney!
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From: 昆士蘭
Registered: 2010-11-15
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Information asymmetry - or why voters make bad decisions

The problem of asymmetrical information occurs when one party in a market possesses more knowledge than another, resulting in the breakdown of that market. Think of the old used car salesman v the ignorant buyer, the salesman's superior knowledge of the market allows him to take advantage of the buyer therefore creating market inefficiencies ie the consumer's scarce resources are not being utilised to his greatest advantage.

Connor Lane with the Mannkal Economic Education Foundation in Perth, W.A. argues that information asymmetry pervades the political market as well.

In some markets, information asymmetry is so pervasive that you would be fortunate to realize that anything has gone wrong at all. The governing of nations falls into this category.

As the world becomes a progressively more complex place, voters are being asked to understand an ever-expanding range of policy points. And those policies are not proposed on their merits, as ways to secure long-term benefits for the people, but in order to gain a short-term election victory.

Lane believes that information asymmetry can be overcome to a great extent by educating voters resulting in an outcome that has a net benefit to society. So, in doing my bit to reduce ignorance and enhance empowerment and make my own life better I'll provide weekly links to one of CATO's websites that examines Federal policy basics. Yes they're US-centric but they apply equally to all nations. If you're unfamiliar with CATO's work they are a private research and policy think tank in the US based upon libertarian political and Austrian economic ideas, ie small government and free market. These series of 13 posts date back to 2009 and can be found here if you don't want to wait for each new one weekly: https://www.downsizinggovernment.org/fe … icy-basics

Last edited by mmm....shiney! (2017-03-02 08:14:35)


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#2 2017-03-02 08:10:00

mmm....shiney!
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Re: Information asymmetry - or why voters make bad decisions

Topics:

1.      Fraud and Abuse
2.      Types of Federal Spending
3.      Federal Worker Pay
4.      Infrastructure Investment
5.      Federal Debt
6.      Privatization
7.      Cost Overruns
8.      Central planning
9.      Congressional Failure
10.    Fiscal Federalism
11.    Bureaucratic Failure
12.    Spending Cut plan
13.    Constitutional Basics


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#3 2017-03-02 08:12:16

mmm....shiney!
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From: 昆士蘭
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Re: Information asymmetry - or why voters make bad decisions

1.      Fraud and Abuse

Fraud and Abuse in Federal Programs

    Chris Edwards and Tad DeHaven

August 1, 2009

The federal government is a vast money transfer machine. It spends hundreds of billions of taxpayer dollars each year on subsidy programs—from the massive Medicare to hundreds of more obscure programs that most people have never heard of. There are more than 1,800 federal subsidy programs.1

With such a huge array of handouts, the federal budget has become victim to large-scale fraud and abuse—that is, people taking government benefits to which they are not entitled. Just about every subsidy program suffers from fraud and abuse, and we illustrate the problems here with discussions of Medicare, Medicaid, housing programs, student aid, and farm subsidies. Losses to federal taxpayers from fraud, abuse, and other types of improper payments are in the ballpark of $100 billion a year or more.2

There have been efforts to reduce improper payments, but the abuse of federal programs continues at high levels. We think that federal subsidy programs should be cut because they harm the economy and are unfair to taxpayers.3 But endemic fraud and abuse provides an additional reason to pursue cuts and terminations to many federal programs. 
Medicare and Medicaid

Fraud in the two main federal health programs is huge, imposing costs on taxpayers at least in the tens of billions of dollars each year. As broad-based government programs, the massive size of Medicare and Medicaid makes them very difficult to police. Medicare, for example, processes 1.2 billion claims each year by computer, generally without human eyes checking them for accuracy.

Let's look first at the fraud and abuse problems in Medicare. The Government Accountability Office estimates that there are about $17 billion of improper Medicare payments each year, including fraudulent and erroneous overpayments to health care providers. 4 That figure does not include the huge new prescription drug benefit, which is thought to be highly susceptible to abuse.

Other estimates of improper Medicare payments are higher. Malcolm Sparrow of Harvard University, a top specialist in health care fraud, argues that estimates by federal auditors do not measure all types of fraud. He believes that as much as 20 percent of federal health program budgets are consumed by fraud and abuse, which would be about $85 billion a year for Medicare. 5

Click on the link above to read more.


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#4 2017-03-02 08:36:14

JulieW
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From: Australia
Registered: 2010-10-14
Posts: 11,132

Re: Information asymmetry - or why voters make bad decisions

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#5 2017-03-12 23:04:58

mmm....shiney!
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Re: Information asymmetry - or why voters make bad decisions

2. Five Types of Federal Spending

Five Types of Federal Spending

    Chris Edwards

March 1, 2014

The federal budget includes a vast array of programs in hundreds of agencies. But when boiled down, the budget consists of just five basic spending activities: compensating federal workers, purchasing goods and services, giving aid to state and local governments, transferring wealth through subsidy and benefit programs, and paying interest on the federal debt.

The federal government spent $3.9 trillion in 2013, according to the Bureau of Economic Analysis (BEA).1 Transfers were the largest spending activity at $1.98 trillion, followed by purchases at $571 billion, aid to the states at $510 billion, interest at $414 billion, and compensation at $407 billion.2

50% of the US Federal government's financial activity centres around transferring wealth from producers to looters.

Click on the above link to continue reading.


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#6 2017-03-12 23:30:46

sammysilver
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Re: Information asymmetry - or why voters make bad decisions

The Rise and Rise of Michael Rimmer is a British 1970 satirical film starring Peter Cook, and co-written by Cook, John Cleese, Graham Chapman, and Kevin Billington, who directed the film. The film was devised and produced by David Frost under the pseudonym "David Paradine".

The film satirised the growing influence of PR, spin and opinion polls in British politics,[1] as well as parodying political figures of the time such as Harold Wilson and Enoch Powell. Cook admitted later that he had partly based his portrayal of the Rimmer character on David Frost, who provided funding for the film[2] and took an executive producer credit.

Cast

Peter Cook as Michael Rimmer
Denholm Elliott as Peter Niss
Ronald Fraser as Tom Hutchinson
Vanessa Howard as Patricia Cartwright
Arthur Lowe as Ferret
George A. Cooper as Blacket
Harold Pinter as Steven Hench
James Cossins as Crodder
Roland Culver as Sir Eric Bentley
Dudley Foster as Federman
Dennis Price as Fairburn
Ronnie Corbett as Interviewer
John Cleese as Pumer
Diana Coupland as Mrs. Spimm
Michael Bates as Mr. Spimm
Graham Chapman as Fromage
Valerie Leon as Tanya


The price we pay for the good life is public servitude.

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#7 2017-03-19 20:44:26

mmm....shiney!
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Re: Information asymmetry - or why voters make bad decisions

Reducing the Costs of Federal Worker Pay and Benefits

Chris Edwards

September 20, 2016

The federal government employs 2.1 million civilian workers in hundreds of agencies at offices across the nation.1 The federal workforce imposes a substantial burden on America's taxpayers. In 2016 wages and benefits for executive branch civilian workers cost $267 billion.2

Since the 1990s, federal workers have enjoyed faster compensation growth than private-sector workers. In 2015 federal workers earned 76 percent more, on average, than private-sector workers. Federal workers earned 42 percent more, on average, than state and local government workers. The federal government has become an elite island of secure and high-paid employment, separated from the ocean of average Americans competing in the economy.

Spurred by the large budget deficits of recent years, policymakers have trimmed the growth in federal wages. In particular, they imposed a partial freeze on federal wages from 2011 to 2013, which saved billions of dollars. To find further savings, policymakers should turn their attention to the generous benefit packages received by federal workers. They should also reduce the overall size of the federal workforce by terminating low-value programs.

Reducing the Costs of Federal Worker Pay and Benefits

Last edited by mmm....shiney! (2017-03-19 20:45:08)


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#8 2017-03-28 18:49:51

mmm....shiney!
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From: 昆士蘭
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Re: Information asymmetry - or why voters make bad decisions

Infrastructure Investment

Chris Edwards

January 13, 2017

Infrastructure investment is crucial to the modern economy. Infrastructure refers to long-lived fixed assets that provide a backbone for other production and consumption activities in society. In the United States, most infrastructure is provided by the private sector, such as pipelines, power stations, freight railways, and cell phone networks.

Government infrastructure, such as highways and bridges, is also important. Some advocates say that our infrastructure is crumbling and that more federal spending is needed to fix the problems.1 However, infrastructure investment will only spur economic growth if it is allocated to high-value projects and constructed in a cost-effective manner. Federal investments have a poor record in this regard.

Decades of experience show that federal involvement in infrastructure often leads to waste and inefficiency. Funds are misallocated and projects get bogged down in mismanagement and cost overruns. These sorts of problems have plagued federal infrastructure since the 19th century.

This study discusses the problems of federal spending on infrastructure. It argues that the states and private sector are more likely to make sound investments without federal aid and regulations distorting their decisionmaking. The study also examines the global trend toward privatization. Many countries have partly or fully privatized highways, airports, air traffic control, seaports, and other infrastructure over the past three decades.

Federal policymakers should study the reforms abroad and work to reduce barriers to private infrastructure investment in the United States. Harnessing entrepreneurs and private investors to fund, build, and manage infrastructure would reduce taxpayer burdens, improve economic efficiency, and spur innovation.

Read the entire article here: Infrastructure investment


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#9 2017-04-04 04:42:08

mmm....shiney!
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Re: Information asymmetry - or why voters make bad decisions

The Problems with Federal Government Debt

Chris Edwards

October 1, 2015

The federal government spends hundreds of billions of dollars more each year than it collects in taxes. Those large budget deficits are financed by issuing growing amounts of debt. Federal debt now totals more than $13 trillion, or about $107,000 for every household in the nation.1

Accumulated federal debt has doubled over the past seven years, and it will keep growing unless policymakers enact major reforms. High and rising debt harms the economy, and it will impose a large burden on future taxpayers. It could also lead to a financial crisis, like we have seen in Greece and other nations.

Historically, federal debt has spiked during wars, but lawmakers have always reduced the load when crises subsided. Recently, however, deficits have been chronic and official projections show a nonstop gusher of red ink in coming years. When measured as a percent of the economy, federal debt has never been as high during peacetime as it is today.

This essay looks at the history of federal debt and describes five types of harm that it causes. It concludes that policymakers should cut spending to balance the budget and reduce debt. In the near term, that would spur economic growth by reducing the distortions caused by much of federal spending. Over the longer term, it would boost capital formation, increase macroeconomic stability, and reduce pressure to impose harmful tax increases.

Read more here: The Problems with Federal Government Debt


The woolgrower's target shall be the good thriving of his flock and its pastures, and so of himself and those whose livelihoods depend on his enterprise.
"The Woolgrower's Companion", 1906.

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#10 2017-04-04 10:52:40

errol43
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From: Bundaberg
Registered: 2010-04-13
Posts: 6,330
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Re: Information asymmetry - or why voters make bad decisions

mmm....shiney! wrote:

The Problems with Federal Government Debt

Chris Edwards

October 1, 2015

The federal government spends hundreds of billions of dollars more each year than it collects in taxes. Those large budget deficits are financed by issuing growing amounts of debt. Federal debt now totals more than $13 trillion, or about $107,000 for every household in the nation.1

Accumulated federal debt has doubled over the past seven years, and it will keep growing unless policymakers enact major reforms. High and rising debt harms the economy, and it will impose a large burden on future taxpayers. It could also lead to a financial crisis, like we have seen in Greece and other nations.

Historically, federal debt has spiked during wars, but lawmakers have always reduced the load when crises subsided. Recently, however, deficits have been chronic and official projections show a nonstop gusher of red ink in coming years. When measured as a percent of the economy, federal debt has never been as high during peacetime as it is today.

This essay looks at the history of federal debt and describes five types of harm that it causes. It concludes that policymakers should cut spending to balance the budget and reduce debt. In the near term, that would spur economic growth by reducing the distortions caused by much of federal spending. Over the longer term, it would boost capital formation, increase macroeconomic stability, and reduce pressure to impose harmful tax increases.

Read more here: The Problems with Federal Government Debt


What about Private debt and State and local council debt? Refer Australian debt clock!

Regards Errol 43

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