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It’s essential to explore the motivations and mechanisms in play to understand how the Swamp grows and grows. Recently, we tackled the motivations for exploring the Law of the bureaucrat (“The bureaucrat is the smartest person in the room.”), which means that the bureaucrat cannot be questioned. Now, we explore the major mechanism used by the bureaucrat to increase his own power: The Law of Subsidy.
The Law of Subsidy says, “When you subsidize something, you will get more of it, and it will get more expensive.” Examples of this are almost everywhere in government. One might argue that virtually every government program exhibits features of this Law. I suppose there might be naysayers, but basically, every program is, in fact, a subsidy of one sort or another.
Most of us think of subsidies as simply money sent to a program to make it appear less expensive. Of course, that will attract more people to the program, so you get more use of the program. What most economists miss is that the bureaucrat running the program will use that increase to demonstrate the need to make the subsidy available to even more people. Hence, it gets more expensive.
But most subsidies aren’t direct. Many, such as Federally Insured Student Loans and Pell Grants, are actually indirect subsidies to universities. I’m sure you can find an almost unlimited number of them if you look far enough. And the hits keep coming.
Subsidies also come in the form of legal mandates and restrictions. Again, the examples are legion. As we discuss the politics of various events and proposals, you will begin to see how almost everything in DC, and hence the Swamp operates according to these Laws.
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