When A Government managed Project Overruns

By Adreanne Fessler

Now, when the community on our island is much larger, compared to the beginning of just three boys using their hands to catch fish for food every day, some people may think that the economics of this island changed. Is that true?

Just as the principles of mathematics do not change with the scale of the problem, basic economic principles do

• Language: English
• Publisher: Adreanne Fessler
• Release date: May 4, 2024
• ISBN: 9798869359230

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When A Govern ment managed Project Overruns

When A Govern ment managed Project Overruns

Copyright © 2023 by Adreanne Fessler

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : ECONOMICS AND SMALL ECONOMICS

CHAPTER 2 : UNDERSTAND YOUR PRODUCT CLEARLY

CHAPTER 3 : DIFFICULTIES OF THE PLANNING PROCESS

CHAPTER 4 : PROJECT MANAGEMENT

CHAPTER 5 : THE EFFECTS ARE VISIBLE

CHAPTER 1 : ECONOMICS AND SMALL ECONOMICS

Now, when the community on our island is much larger, compared to the beginning of just three boys using their hands to catch fish for food every day, some people may think that the economics of this island changed. Is that true?

Just as the principles of mathematics do not change with the scale of the problem, basic economic principles do not change with the scale of the economy. It's just that it's difficult for us to recognize those principles because there are so many layers that appear between the borrower and the lender. However, the direct connection between self-sacrifice of immediate consumption, savings, credit, investment, economic incentives, as well as social and economic progress, remains exactly the same.

Investing in infrastructure can have a huge impact on the economy. However, investing in infrastructure is only beneficial if the benefits are greater than the costs. On the contrary, projects of this type will waste resources and prevent growth.

Today, many politicians and economists make the mistake of viewing infrastructure investment not as a short-term cost for long-term gain, but as an immediate measure to create jobs and boost the economy. This perspective can lead to misallocation of resources and waste, as well as unintentional loss of jobs in other areas.

For more than half a century, the United States has invested little in infrastructure. The cost of ignoring this trend will become a burden on the economy. Furthermore, the benefits (of investing in infrastructure - ND) only appear in the future, when projects are successful.

In our story, the 182,500 fish borrowed to build the Rain Water project cannot be used to finance other investment projects that create jobs on the island. Obviously this is a great opportunity. If this money is used to invest in some failed infrastructure project, such as the Bridge to Nowhere project.6famous in Alaska in the past, the island's savings will be wasted, and 250 workers will also lose two years of hard labor!

In early American history, projects like the Stormwater project were often private-sector initiatives. Due to the high-risk nature of these types of projects, today in an era of total government control, it is difficult to imagine infrastructure that could be effectively financed, built and operated by Private companies run for profit. However, it is true that things were like that in the past.

For example, the New York subway system is largely run by private companies, and was operated outside the control of the city government for nearly four decades. Despite the very high construction costs, this system still makes profits for investors. Furthermore, it is very impressive that subway fares have not increased in 40 years!

Now, it is easy to convince voters that public utilities - such as sewers, highways, canals, bridges etc. - should be managed by the Government. Politicians have successfully argued that private companies, pursuing pure profits, will exploit the public at the earliest opportunity.

The evidence supporting the above arguments is mostly emotional. What is more certain is that monopolistic government control of public projects and services almost always leads to inefficiency, corruption and bribery, as well as declining quality.

In addition, when a government-managed project overruns its budget or is poorly served, the principles of free market discipline are not applied to rescue it. Instead, the Government just needs to increase taxes, which will waste social resources and reduce people's living standards.

Trade is also adversely affected by such misconceptions. In their efforts to protect American jobs from competition from foreign workers, opponents of free trade have ignored the benefits of imports, along with their hidden costs to consumers. use once when they have few choices when buying goods and services.

For example, if a foreign manufacturer can sell t-shirts in the US at a cheaper price than t-shirts made in the US, then Americans will spend less money buying t-shirts. The money saved from this will be used to buy other goods, such as water skis. This could benefit skateboard manufacturing companies operating in the US, which currently offer the best skateboards.

So what will happen to the T-shirt workers in America who now lose their jobs? If their employers cannot compete in the T-shirt industry, then it is true that workers will have to find other jobs. But the goal of the economy as a whole is not simply to create jobs, but to create jobs that maximize labor productivity.

As a whole, a society cannot benefit from the continued inefficient use of labor and means of production. If the United States does not have a competitive advantage in t-shirts, they need to find another product that they have an advantage in producing.

If trade barriers are erected to protect domestic jobs, the cost of T-shirts will continue to be high. Consumers will then have less money to buy other goods, such as water skis, and the producers of these other goods will be disadvantaged. It is easy to see a job being saved, what is more difficult is to see a job not being created!

It is clearly absurd to waste our labor on producing things that can be produced more efficiently abroad. If we focus on the goods and services we can produce most efficiently, we can exchange them for things that foreign countries do better. And finally, we will have more material wealth.

The problem, of course, is that the US dollar is artificially overvalued, taxes are high, and regulations are restrictive on wages and labor, so we are not very competitive in many ways. categories of goods and services. This clearly needs to change.

CHAPTER 8: THE REPUBLIC IS BOUND

At first, our island nation had no government, at least because the diet on the island at that time was only fish.7! Able, Baker and Charlie are long-time friends and they can then resolve their conflicts gently. But as simple societies become complex, it becomes clear that there will be a need for some form of centralized power.

As the island's population increased, so did misunderstandings and conflicts. When words cannot resolve conflicts, spears will do their job.

In that early period, because there was no mutual protection mechanism, there were often gangs of fish thieves raging, causing a lot of trouble for the islanders.

Worse, sometimes people from Bongobia Island come to invade. Bongobia people are not only good at drumming, but are also fierce warriors, so when they come to loot, the fish savings on the island are often wiped out.

Obviously, islanders need to unite to protect each other and maintain security. They need leadership. But empowerment always involves risks, because power is almost always abused.

After experiments with the chieftaincy system, the islanders decided to establish a Government responsible to the entire population, while at the same time having limited rights to take away the economic freedoms that had created the initial prosperity in the island. island. It was decided that the islanders would elect 12 Parliamentarians, including a President with executive authority.

To protect the island against outside invasion, the Parliament established and supervised a navy, consisting of a fleet of warships with swords and spears at the ready.

To stabilize society and ensure all members the rights to life, liberty and property, the Parliament also established a court system to resolve disputes, along with a police apparatus to enforce judgments. of the court.

And to promote trade, the Parliament also built and managed a lighthouse system on the island, making sea traffic more convenient and safer, preventing ships from bumping into the sharp rocks of the island. this island.

Finally, to be able to maintain the operation of the above modest apparatus, the islanders agreed to pay an annual tax, of course in fish. These taxes are transferred to a separate Government account, also opened at a bank on the island. Parliament will use this account, or fish, to spend on their work.

Because the islanders were fiercely independent, many later became concerned about placing too much power in the hands of too few individuals.

To ensure that Parliamentarians do not manage and use tax dollars carelessly, a constitution is drawn up that clearly outlines the powers assigned to Parliament. Rights not mentioned in the Constitution as assigned to Parliament still belong to the people. When there is controversy about what Parliament is or is not allowed to do, a Supreme Court is established to enforce the Constitution, implementing a mechanism to check the power ambitions of Parliamentarians.

After the Constitution was voted on and adopted, our island nation became the Republic of Usonia8.

Very wisely, the newly established Government decided not to use all the taxable fish. They reserved a portion, ready in case a storm swept through and prevented the islanders from going fishing, or in case the Bongobia people came to loot...

And even though the Government pays certain people, such as lightkeepers, police, judges, and the navy, everyone understands that these jobs exist because the Government taxes them. producers on the island. If those people refuse to take fish to pay taxes, of course our civil servants have nothing to put in their mouths!

At this point, everything seems to be okay. But there's always something going wrong....

REALITY CHECK

Because islanders understand that Government spending is the same as taxpayers' spending, they believe that only those who pay taxes have the right to decide how to spend. As a result, voting rights were limited, applying only to those who paid taxes.

It is also understood that taxes reduce the amount of savings and limit the supply of capital for investment. But most people agree that the commercial benefits come from increased security, safer maritime traffic, and a court system that effectively resolves disputes and ensures enforcement of contracts. Dong etc. will compensate for the above mentioned lost savings.

WHAT REMAINS

It's a shame that so few Americans understand that this country was founded on the idea of minimizing the role of government. Influenced by the reformist philosophical theories of freedom, reason, and science that prevailed in the seventeenth and eighteenth centuries, our founders sought to build an entirely new kind of relationship between people and the Government, according to which the supreme power belongs to the individual, their rights are inviolable.

Immediately after the War of Independence, instead of establishing a national government - something many Americans did not want - the US Constitution was created as a cage perfectly designed to contain the beast. The government got out and ran wild! Not only protecting the people from the Government, the Constitution also protects the rights of minority groups against the imposition of the majority.

The Constitution intended to separate the powers of the federal government into separate branches, to divide power into many states, and most importantly to prevent the federal government from usurping any power that the Constitution determined it would keep.

As a result, the United States became a country where individuals were guaranteed freedom and personal property, without being prevented from using their property in arbitrary ways. The fact that those rights do not apply to all members of the new nation in no way diminishes the audacity of the idea. This is something that has never been legislated in any other country in the world.

Over time, it seems this vision is fading. In times of economic crisis, many people believe that the Government needs to concentrate more power, and people may have less freedom. Unfortunately, in the current crisis, this trend is greatly supported.

In our efforts to alleviate the pain of the economic downturn, we have forgotten that freedom entails risks. If the Government had to cure every problem, no one would be truly free anymore. If we eliminate the freedom to fail - meaning the freedom to explore, risk, experience and even fail in an area that has never existed before, or has not been licensed or approved. prescribed by law; then we are also eliminating the freedom to achieve success in this field.

CHAPTER 9: GOVERNMENT BECOMING CREATIVE

Over many generations, the Government on our island nation still operates according to plan. Wise and prudent leaders succeeded one another, always maintaining a good focus on promoting business expansion and personal savings. Taxes are levied at an acceptable level, and management and regulation by State laws for business and production sectors is still light. As production expands, businesses earn profits, prices continuously fall and purchasing power increases. After a few generations, almost every family has its own canoe to use, some families even have two or three!

At this time, only a few fishermen working hard were enough to ensure the island's food needs, so labor and means of production were devoted to other goals. On the island, completely new professions and services began to appear, unprecedented in the days when people had to use their bare hands to catch fish. Companies that decorated tents, made drums, and even shamans and shamans began to appear and develop. The island became so prosperous that a theater was inaugurated on its west coast. The excellent play The Fishman Cometh9received enthusiastic praise.

Gradually, some Congressmen made emotional arguments that the connection between paying taxes and the right to vote under the original Constitution was extremely undemocratic! In the spirit of progress, this restriction was lifted, thereby admitting a large number of voters who had little or no interest in the Government's careful budget spending.

As the salary list in the Government apparatus swells with the size of the economy, the position of a member of Parliament naturally becomes prestigious and desirable. In the past, the Parliament was just a gathering place for the oldest and most respected people, a kind of Senate. Now, this organization is starting to attract the participation of ambitious, truly enterprising people.

One of the innovative minds who hopes to be elected to Parliament is Franky Deep. He noticed a trend in human behavior that could give him momentum to rise to power.

That trend, according to Deep's observation, is that people in general like free and hate paying taxes. From there he made a plan: if he could think of a way to make it seem like he was giving the islanders something for free, he would win their unconditional support. Unfortunately, everything the Government has in its hands comes only from tax revenue. Parliament didn't catch any fish! If we have income, we have nothing, how can people give away more than what they take in?

But then, after a bad tropical storm hit the island, Mr. Franky smelled an opportunity (Politicians never seem to let a crisis or disaster go to waste!).

He raised his voice and spoke to his people: My people, the recent storm has caused heavy damage to all of us. Many people have become empty-handed and homeless. We cannot just sit still and do nothing. If elected, I will launch a Government reconstruction program for the most difficult people, helping them recover from the damage caused by the storm. He assured the people that the cost of reconstruction would be offset by the economic activity that the spending would generate.

His election opponent, Mr. Grouper Cleaver, offered nothing beyond pledging to guide the efficient use of the island's savings, as well as not to interfere with citizens' freedoms.

And no one was surprised when Mr. Franky Deep was elected Speaker of the Parliament!

Deep's election victory does not change the fact that there are not enough fish stocks to fund his proposed spending plan. To solve this problem, Deep comes up with another plan. The government will issue paper money, called Fish Reserve Notesten, people can use this money to exchange for real fish from the Government, deposited in an account at Goodbank. People can exchange paper money for fish immediately, or use paper money to exchange for goods and services just like when they have real fish in hand!

Feeling very uncomfortable about this, the Chief Justice of the Supreme Court on the island participated in the debate and pointed out that the Constitution does not give Parliament the right to take money from one person to use for the benefit of another. , nor has the right to issue paper money in place of real fish.

Parliamentary Chairman Franky Deep handled this issue cleverly by immediately nominating one of his political friends to a judge's seat on the Supreme Court. Juries are now more cooperative with Parliament, issuing verdicts with concepts that can be understood and positively interpreted differently across generations. The reason is because current social problems may be