Should Government Run Like A Business?

If you’re interested in this question, please check out what StrongTowns.org  had to say about it. 

Long story short, our revenue must be higher than expenses in order to maintain the functions of government. If our revenue doesn’t outweigh expenses, good things become “meh” and the mediocre get worse.

On the flip side, it’s not government’s responsibility to maximize profit. Over-taxing citizens for bare-bones services doesn’t lead to anything good.

So, is the local government’s primary goal to grow the city through number of residents, jobs and tourists? One mindset says:

“I believe in something I call the virtuous cycle of the successful city. The object of a city should be to grow — and that is grow the number of residents, grow the number of jobs, grow the number of visitors. Because the marginal revenue of those additional people is greater than the marginal cost. And then you can take that net profit, if you will, and reinvest it back in quality of life in the city, in an affordable housing, and education, and safety, and social services and when you do that and you improve quality of life, more people come, perpetuating the virtuous cycle.” — Dan Doctoroff on Freakonomics, June 6, 2018

Another mindset says this:

the suggestion that, “the object of a city should be to grow,” is deeply flawed. Despite the suggestion, the marginal revenue is not greater than the marginal cost, not even in New York City. What Doctoroff calls “net profit” we call a sugar high — a short-term bump in cash flow from the new growth while the community takes on and an even greater amount of long term liabilities. This is mindset can be fatal because the goal of a city isn’t to grow; The goal of a city is to endure. -Charles Marohn

I really like the last quote. The goal of a city is to endure. Clinton, Fulton, Camanche and the surrounding communities have endured through the highs and lows of industry growth. If the goal of a city is to survive, we’re doing our job and we’re doing it well. The Gateway Region will be around today, tomorrow and the day after that. We will endure through bull and bear markets. How do I know? We already have!

Go do something positive today.

Looking Forward,
Chris Busker

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