Why Are People So Forgiving of Government Failure?
Once upon a time, I developed a theory that we have much lower expectations for public-sector performance than we do for private-sector performance.[1] We saw this in accounting standards that — when applied to Enron — resulted in market forces shutting that firm down, while the Department of Defense loses billions of dollars annually. The difference in terms of waste between the two sectors is exponential, but while Enron is held accountable for its ethics, the government gets a pass.
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Social Security: Adding insult to injury, the Congressional Budget Office ran more than 500 possible simulations reflecting different possible outcomes for the program, given its current fiscal health. The purpose was to measure which generation among the cohorts born in the 1940s, the 1960s, and the 1980s would not receive Social Security benefits.[9] The results, published in October 2010, were not promising, as recently spelled out by Bruce Krasting in Business Insider. Krasting writes,
If you were born in the 1940’s the probability that you will receive 100% of your scheduled benefits is nearly 100%. The people in this age group will die before SS is forced to make cuts in scheduled benefits. If you were born in the Sixties things still do not look so bad. Depending on how long you will live the odds (76+%) are pretty good that you will get all of your scheduled benefits. However, if you were born in the Eighties you have a problem. The numbers fall off a cliff if you are between 30 and 40 years old today. In only 13% of the possible scenarios you will get what you are currently expecting from SS. If you were born after 1990 you simply have no statistical chance of getting what you are paying for.
