The Cost of Ignorance

By Keith D. Rodebush, Contributor to US Daily Review.

What is the price of lost knowledge? As interesting as the question is, it is of course unanswerable as written. But what of ignored knowledge? That is to some extent more quantifiable than the former, as the knowledge is still available for context. In this case I am referring to the knowledge of our Founding Fathers; available to anyone with a computer and internet access or who qualifies for a library card. And yet, so often in modern times we have become arrogant in that we think we are smarter than them now. The damage done to society is quite obvious for those who care to look. One of the primary tenants of the Founders in constructing our republic was that government is inherently tyrannical, corrupt and inefficient. Yet, we have an entire generation for whom government is the perceived solution to societal problems, not the cause. Let us look at one symptom of our recent decline in prosperity, cost, and see if government involvement is beneficial or destructive. In every sector where government has greater control, costs have risen dramatically; Healthcare, Housing, Education. In some cases the destruction is fatal as in the recent housing bubble bursting, creating the economic downfall of 2008.

As the government has intervened into healthcare the costs have risen exponentially. Healthcare is a complicated industry and certainly there are many aspects to costs which are normal and healthy such as research and development of new techniques, equipment and drugs. But government involvement in healthcare via Medicare and Medicaid have changed the landscape for health providers and many are almost completely beholding to government for their survival, i.e. Senior Living/Care centers. Ask any medical office professional how much impact federal regulations have on the paperwork required for healthcare facilities and you will see that much of the cost of modern healthcare involves keeping up with the ever-increasing mountain of paperwork required to avoid scrutiny from an all powerful central government bureaucracy.

The governments knee-jerk response to rising prices is simple price controls which of course only exacerbates the problem. A growing number of doctors are simply refusing to take Medicare patients in response. Government intervention takes the market out of the cost structure creating anomalous increases. Example: Testing. With a third party payer system, the patient is much more likely to agree to expensive tests that in many cases are not warranted by the current medical condition. Better safe than sorry is an admirable pearl of wisdom but a very expensive one in healthcare. The use of expensive technologies for diagnostic purposes have rendered almost obsolete time honored practices of doctors using intuitive, empirical, personal and much cheaper techniques. Government intervention removing market forces from the system has led to astronomical rises in healthcare costs.

The most basic of economic models is supply and demand. As demand rises supply wanes and prices rise. As supply catches up to demand pricing stabilizes. Any outside interference to this model results in a false model that will inevitably fail. As the government became ever more involved with consumer housing through tax initiatives and eventually mortgage supplements and incentives, the demand for housing grew quickly. As more people became ‘qualified’ for housing loans through government reduction in mortgage standards, the supply of housing fell behind causing prices to rise. This was however, a false pricing mechanism as the demand was not a true market demand. In other words, the ‘new’ demand was not driven by market forces such as increased wealth across income levels, but from less strict eligibility standards imposed by government agencies and public/private institutions such as Fannie Mae and Freddie Mac. The resulting rise in housing values was therefore false and destined to fall, which it did in 2007 and 2008 resulting ultimately in the economic collapse of 2008. As always it is a complicated mix of issues such as an over zealous dependence on housing to support economic growth, but this is what happens when government appears to be an insurance policy against loss. I suppose one could argue that by creating a bubble that ultimately burst, the government reduced housing costs, but who wants to argue that was a good thing?

Finally, the cost of education has risen dramatically congruent to a falling academic level of achievement in America. The more the government gets involved with education, the more it costs and the less education is successful, as witnessed by the Department of Educations abject failure for four decades. America is falling precipitously in world stature in science and math. I recently spoke with a local school superintendent who stated that federal funding makes up 5% of their budget, while required federal paperwork makes up 95% of their administrative costs for such.

The cost of higher education increases as the government increases grants and student loan programs. Universities increase tuitions even through lean years when the rest of the economy is failing because their cost structure is not based on market forces, but by government subsidies, which again result in false demand. Youth don’t base the decision for college on real world cost/benefit analysis. Hence, the failure in higher education quality as well. Recent Occupy Wall Street protestors professing college degrees on miss-spelled signs is a humorous if tragic example of same. In the meantime, colleges such as Harvard boast multi-billion dollar endowments ($32 B in 2011) that continue to grow as Americans struggle with the falling value of the few dollars they make, while simultaneously subsidizing the universities directly and indirectly through taxes.

In Federalist Paper #51 James Madison, arguing for strict constraints on government states, “But what is government but the greatest of all reflections on human nature?” The Founders were keenly aware that the failing nature of Man, made all government inherently corrupt and tyrannical. That we have evolved into a nation that pines for government assistance as if there is any possibility that said assistance will be good and efficient is the height of ignorance of our very own nature, and of the principles of Constitutional republicanism. This ‘Ignored Knowledge’ is currently threatening the very existence of a nation where the people are self-governed, free and prosperous. Let us proceed forthwith to re-instill this knowledge in our youth, that they may be armed to fight for their Liberty, as we have woefully failed to do so to our ultimate shame.

Keith D. Rodebush is a Christian businessman, a writer and an armchair scholar. He has a Bachelor of Science in Architecture from the University of Arkansas. Keith is currently working on a novel and periodically writes at his blog “Ignarus Semino Dominatus

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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