February 17, 2011

Fraud, waste, and abuse pales in comparison to problems with Congressional spending

Economist Veronique de Rugy testified Thursday before the House Committee on Oversight and Government Reform about why wasteful spending does not stop at earmarks and overpayments.

Fraud, waste, and abuse are indeed problems worthy of Congressional attention, but it pales in comparison to the problems that exist in current Congressional spending patterns and the damage to the economy caused by the misallocation of resources and the creation of perverse incentives, said de Rugy.

“Recent policy changes have hampered business investment, making a bad situation worse,” she said. “What would increase employment and stimulate economic growth is private investment—not government spending labeled as investment.”

“There are things that only the federal government can do, but when the federal government gets involved where it shouldn’t be, it wastes resources, time, and taxpayers’ money,” said de Rugy. “This understanding can guide us toward making hard decisions about where to cut spending, but all parts of the budget must be on the table.”

“We need serious, strict, and unavoidable budget rules that tie Congress’ hands, and restore fiscal discipline,” said de Rugy. “With such reforms, the American people will start having confidence in their future.”