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I often see comments like this, but what's a good solution to the ever expanding cost of public services (to the point most of western europe now has gov spendi

I often see comments like this, but what's a good solution to the ever expanding cost of public services (to the point most of western europe now has gov spending at 40%+ of gdp)? You do need to cut back if you're starting to run a significant deficit or more and more of your budget will go on interest payments. Any large org tends to get more inefficient with time as it accumulates inefficient components it can't get rid of, but unlike companies, government departments aren't going to go bust and close down. I genuinely don't know a good answer here, but would be curious about other people's.

fransje26 3y ago
> (to the point most of western europe now has gov spending at 40%+ of gdp) Perhaps that's fundamentally barking up the wrong tree. West-European governments in the post WW2 era have had higher relative spendings then that, without every financial expert and their dog declaiming that doomsday is near and services need to be cut. We've been able to finance better healthcare before, we've able to finance better education before, we've been able to finance better infrastructure before, etc. So which costs have risen out of proportion to the point that none of that is possible today.
- concordDance 3y ago
  > So which costs have risen out of proportion to the point that none of that is possible today. Basically all of them. https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost... Which I think is partially due to institutions becoming less efficient with time as more organizational scar tissue accumulates (certainly seen a lot of this at the companies I've worked for). Plus gov departments tend to accumulate extra low-return responsibilities from politician gimmicks (the mismatch between what sounds good in a headline and whats cost effective). Which in turn I think comes from scope insensitivity, we just aren't good at understanding scale and underestimate defuse costs.
- Rinzler89 3y ago
  >So which costs have risen out of proportion to the point that none of that is possible today. It's not the costs that have rise sharply, it's the revenue and taxes that have declined since WW2 due to increased competition from globalization and the offshoring of jobs abroad, plus tax heavens aiding big corporation avoid paying taxes locally in western european countries, meaning governments today are missing out on a lot of income they used to get in the past, income which is now in places like China and in tax heavens.
  - fransje26 3y ago
    I don't know of that's the cause, but it could be an interesting theory to look into. But taking job offshoring, as an example. It could be fairly straightforward to determine how much tax revenue a car produced in, say, Germany, contributes to the economy, vs the same car imported from abroad. But where it gets complicated is that, German unemployment being low, the worker that lost his or her job to offshoring didn't turn out jobless, and by his or her work is still contributing to tax incomes. So what is the loss? A lot of money is lost to tax havens, but the hourly productivity has also increased drastically, meaning that governments might still get more income per worker, per working hour. Governments are loosing in absolute terms, but have they lost income in relative terms? The general feeling I have, is that a lot more money is lost to greed. As an example, we could take healthcare. It is undeniable that the average quality of healthcare has increased (for instance, looking at cancer suitability), but the cost of basic healthcare items have also, in some cases, increased disproportionately. (For instance looking at the cost of insulin in the US, or a dose of COVID vaccine, etc). So the general impression is that we are paying a lot more than before for only a slight increase in health and well-being. And how does that apply to other trades? Construction costs have exploded, but we are not getting much better houses for it. And therefore the general question was more: which parts of society are profiteering from forms of greed and price-gouging, how can we quantify that, and what can be done about it so that we, as a society can continue to improve on the care and the services we offer to our citizens, as opposed to accepting regression as the inevitable way forward.
    - Rinzler89 3y ago
- Aerroon 3y ago
  But maybe those experts should've been raising alarm over this? Western Europe is doing pretty poorly when it comes to economic growth. And prior to that Germany got a lot of help from the US, Spain did not do well, Italy was questionable, Portugal did not do well. Netherlands did well, but a lot of it is down to their location as a place for trade. That only leaves France and Belgium. Did they do well? >We've been able to finance better healthcare before Modern healthcare is better than anything before. Even in its dysfunctional state it is better. Sure, you might have to wait longer to see a specialist, but the number of cases where the reply you get is "nothing we can do" is lower. The things you mention are more expensive to provide today. One of the reasons is that our requirements for those services are much higher leading to much higher inherent costs.
  - intended 3y ago
    Based on what data ? I checked and I can't see these claims being supported. I could be wrong but and may have misunderstood something.
    - Aerroon 3y ago
      How well the countries are doing? Nominal GDP/capita has been relatively stagnant in most of western Europe: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=FR-DE-ES-IT-US&start=1980 https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
      - intended 3y ago
        Why are we using nominal GDP/C? You should use real GDP/C This is the Gini coefficient for those countries: https://data.worldbank.org/indicator/SI.POV.GINI?locations=FR-DE-ES-IT-US https://data.worldbank.org/indicator/SI.POV.GINI?locations=F...
  - fransje26 3y ago
    > That only leaves France and Belgium. Did they do well? Looking at France and the quality of their industrial output in the 70s to 90s, ranging from high-speed trains, rockets, passenger airplanes, Concorde, helicopters, (racing) cars, submarines, nuclear power plants, medical labs, etc. I would say yes. Their infrastructure has also been of high quality, so has the education system of their elites, and their healthcare. And from what I could see of Belgium and their infrastructure, it also looked like that period was good for them. > Modern healthcare is better than anything before. Even in its dysfunctional state it is better. This is a more relevant point. The question is if we aren't well past a point of diminishing returns. For instance, for France, the data shows that the life expectancy of women was increasing by 2 years every 10 years, until 2010. It has increased by 0.5 years since then. The life expectancy of men followed a similar trend. In fact, we might not have seen the full effect dysfunctional health care just yet, and we could be riding on the momentum of previous gains. And the ever increasing delays to see a specialist can only have detrimental effects in the long term. In parallel, the disproportionate increase of healthcare costs per patients means that, at some point, life expectancy is going to go down. > One of the reasons is that our requirements for those services are much higher leading to much higher inherent costs. No, I don't think I agree. The house you are getting has not improved 3 fold in quality compared to 20 years ago. The roads you are driving on are not 2 times better. Train travel is not a lot safer, nor faster, nor with more frequent service. On the contrary. The food quality in your supermarket has not improved. The electricity you use still has the same voltage and the same frequency. The clothes you wear are not of higher quality.
AdamN 3y ago
High government spending doesn't mean the government is bigger necessarily. The big expenses are just getting moved right back out to the private sector for agricultural subsidies, energy subsidies, etc... The better metric would be how many employees work (directly or indirectly) for the government and then compare those numbers.
Aerbil313 3y ago
> Any large org tends to get more inefficient with time as it accumulates inefficient components it can't get rid of This is really the crux of it. Same incompetence and inefficiency, we see in tech industry. Are there any serious studies on the disease that comes with scale, and possibly its cure?

fransje26 3y ago

> (to the point most of western europe now has gov spending at 40%+ of gdp) Perhaps that's fundamentally barking up the wrong tree. West-European governments in the post WW2 era have had higher relative spendings then that, without every financial expert and their dog declaiming that doomsday is near and services need to be cut. We've been able to finance better healthcare before, we've able to finance better education before, we've been able to finance better infrastructure before, etc. So which costs have risen out of proportion to the point that none of that is possible today.

concordDance 3y ago
> So which costs have risen out of proportion to the point that none of that is possible today. Basically all of them. https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost... Which I think is partially due to institutions becoming less efficient with time as more organizational scar tissue accumulates (certainly seen a lot of this at the companies I've worked for). Plus gov departments tend to accumulate extra low-return responsibilities from politician gimmicks (the mismatch between what sounds good in a headline and whats cost effective). Which in turn I think comes from scope insensitivity, we just aren't good at understanding scale and underestimate defuse costs.
Rinzler89 3y ago
>So which costs have risen out of proportion to the point that none of that is possible today. It's not the costs that have rise sharply, it's the revenue and taxes that have declined since WW2 due to increased competition from globalization and the offshoring of jobs abroad, plus tax heavens aiding big corporation avoid paying taxes locally in western european countries, meaning governments today are missing out on a lot of income they used to get in the past, income which is now in places like China and in tax heavens.
- fransje26 3y ago
  I don't know of that's the cause, but it could be an interesting theory to look into. But taking job offshoring, as an example. It could be fairly straightforward to determine how much tax revenue a car produced in, say, Germany, contributes to the economy, vs the same car imported from abroad. But where it gets complicated is that, German unemployment being low, the worker that lost his or her job to offshoring didn't turn out jobless, and by his or her work is still contributing to tax incomes. So what is the loss? A lot of money is lost to tax havens, but the hourly productivity has also increased drastically, meaning that governments might still get more income per worker, per working hour. Governments are loosing in absolute terms, but have they lost income in relative terms? The general feeling I have, is that a lot more money is lost to greed. As an example, we could take healthcare. It is undeniable that the average quality of healthcare has increased (for instance, looking at cancer suitability), but the cost of basic healthcare items have also, in some cases, increased disproportionately. (For instance looking at the cost of insulin in the US, or a dose of COVID vaccine, etc). So the general impression is that we are paying a lot more than before for only a slight increase in health and well-being. And how does that apply to other trades? Construction costs have exploded, but we are not getting much better houses for it. And therefore the general question was more: which parts of society are profiteering from forms of greed and price-gouging, how can we quantify that, and what can be done about it so that we, as a society can continue to improve on the care and the services we offer to our citizens, as opposed to accepting regression as the inevitable way forward.
  - Rinzler89 3y ago
Aerroon 3y ago
But maybe those experts should've been raising alarm over this? Western Europe is doing pretty poorly when it comes to economic growth. And prior to that Germany got a lot of help from the US, Spain did not do well, Italy was questionable, Portugal did not do well. Netherlands did well, but a lot of it is down to their location as a place for trade. That only leaves France and Belgium. Did they do well? >We've been able to finance better healthcare before Modern healthcare is better than anything before. Even in its dysfunctional state it is better. Sure, you might have to wait longer to see a specialist, but the number of cases where the reply you get is "nothing we can do" is lower. The things you mention are more expensive to provide today. One of the reasons is that our requirements for those services are much higher leading to much higher inherent costs.
- intended 3y ago
  Based on what data ? I checked and I can't see these claims being supported. I could be wrong but and may have misunderstood something.
  - Aerroon 3y ago
    How well the countries are doing? Nominal GDP/capita has been relatively stagnant in most of western Europe: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=FR-DE-ES-IT-US&start=1980 https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
    - intended 3y ago
      Why are we using nominal GDP/C? You should use real GDP/C This is the Gini coefficient for those countries: https://data.worldbank.org/indicator/SI.POV.GINI?locations=FR-DE-ES-IT-US https://data.worldbank.org/indicator/SI.POV.GINI?locations=F...
- fransje26 3y ago
  > That only leaves France and Belgium. Did they do well? Looking at France and the quality of their industrial output in the 70s to 90s, ranging from high-speed trains, rockets, passenger airplanes, Concorde, helicopters, (racing) cars, submarines, nuclear power plants, medical labs, etc. I would say yes. Their infrastructure has also been of high quality, so has the education system of their elites, and their healthcare. And from what I could see of Belgium and their infrastructure, it also looked like that period was good for them. > Modern healthcare is better than anything before. Even in its dysfunctional state it is better. This is a more relevant point. The question is if we aren't well past a point of diminishing returns. For instance, for France, the data shows that the life expectancy of women was increasing by 2 years every 10 years, until 2010. It has increased by 0.5 years since then. The life expectancy of men followed a similar trend. In fact, we might not have seen the full effect dysfunctional health care just yet, and we could be riding on the momentum of previous gains. And the ever increasing delays to see a specialist can only have detrimental effects in the long term. In parallel, the disproportionate increase of healthcare costs per patients means that, at some point, life expectancy is going to go down. > One of the reasons is that our requirements for those services are much higher leading to much higher inherent costs. No, I don't think I agree. The house you are getting has not improved 3 fold in quality compared to 20 years ago. The roads you are driving on are not 2 times better. Train travel is not a lot safer, nor faster, nor with more frequent service. On the contrary. The food quality in your supermarket has not improved. The electricity you use still has the same voltage and the same frequency. The clothes you wear are not of higher quality.

AdamN 3y ago

High government spending doesn't mean the government is bigger necessarily. The big expenses are just getting moved right back out to the private sector for agricultural subsidies, energy subsidies, etc... The better metric would be how many employees work (directly or indirectly) for the government and then compare those numbers.

Aerbil313 3y ago

> Any large org tends to get more inefficient with time as it accumulates inefficient components it can't get rid of This is really the crux of it. Same incompetence and inefficiency, we see in tech industry. Are there any serious studies on the disease that comes with scale, and possibly its cure?