Friday, July 27, 2007

Gov'ment Deadweight

Maybe I'm just more irritated at my coworkers than usual today, but there's nothing better to create a healthy disrespect for government than actually being part of it.

Fact: Government defines 'deadweight loss' differently than do my microeconomics and IO courses. I considered it the degree of economic loss taking place, i.e. the distance from the best possible solution, or the degree of loss a policy creates from the prior staus quo. It deals with the size of the pie.

Government (and not just Canada, but think tanks, other governments) defines it as windfall gains + spending that falls through the cracks, e.g. if government pays someone to attend training classes and they don't show.

Trying to elucidate that these are not the same has not proved easy. I don't particularly care that government has changed the meannig of language: 'deadweight loss' has certainly got a ring to it that I can see many policy wonks loving, but it's not an excuse to ignore economics.

I just hope I'm not completely out of it and am missing some brutally obvious fact that will exile me from the blogosphere in shame.

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