As we’ve discussed previously, efficient systems require feedback. Without the feedback of the pain that comes from making an incorrect decision, bureaucrats have no incentive to be good shepherds of taxpayer dollars.
For example, the federal government “invested” $527 million in the solar energy company Solyndra. These dollars have been (according to various accounts) diverted to the pockets of Solyndra corporate officers, squandered, kicked-back to corrupt Obama administration officials, or (at best) lost in a noble effort to put Americans back to work. In any event, taxpayers have seen $527 million of their money go down the drain.
The reason why this sort of outrage happens when the feds “invest” is simple: it’s not their money. As we all know, it’s easy to invest/gamble/have parties with other people’s money. Therefore one could reasonably ask, why not make it a requirement for every government official to have a stake in the outcome of every “investment”? (This is just for argument’s sake. Since there is no apparent Constitutional authority for the federal government to funnel taxpayer money into private enterprises, Solyndra-type expenditures should not even be taking place.)
In other words, if the investment is a bust, as was Solyndra, then the loss comes out of the bureaucrats’ pay checks. Let’s see, $527 million divided by approximately 16,000 direct Department of Energy employees equals about $33,000 per employee. Wow, no bonus this Christmas!
What if the investment is a success? Based on the government’s track record that would be highly unlikely, but if it should ever occur, we the people can work out an appropriate bonus.