21 May 2008

Reason No. 724 Why Government Regulation Should Be Kept To A Minimum

Why should government be kept out of healthcare? Why should government be kept out of crime control (which is often code for gun control)?

Here is a big reason. Though not a firearms story, it is yet another example of the inefficiencies of government bureaucracy.

" . . . By firing its actuarial consultant last week, the New York State Legislature shone a light on one of the public sector’s deepest secrets: All across the country, states and local governments are promising benefits to public workers on the basis of numbers that make little economic sense . .

" . . . The numbers are off-base for a variety of reasons. Sometimes there is a glaring conflict of interest, as there was in Albany, where the consultant was being paid by the workers seeking richer benefits. More often, there is subtle pressure on the actuary to come up with projections that make the pension fund look good . . .

"After the Fort Worth pension fund was found to have a crushing $410 million deficit, Mr. Abbott sent his staff to dig through more than a decade’s worth of documents, to find out why. They found that in 1990, an actuary had calculated that the city could put less money into the pension fund and increase workers’ benefits simultaneously — without making a dent in the fund — if he assumed that the fund would earn 10.23 percent a year on its investments. This worked on paper but not in the real world. In reality, Fort Worth actually lost money on its pension investments that year. And the new benefits did, in fact, have a cost.

"But the city forged ahead, armed with an actuarial opinion letter stating that “the numbers are correct.” It generously sweetened public workers’ benefits five times in subsequent years."

So if its not incompetence, it's outright lying (in the business world we call that fraud). . . but then we've NEVER seen that before in firearms regulation, or firearms possession prosecutions . . . .or have we?

h/t to Glenn Reynolds

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