Why is Government Quality So Important? The quality of a country’s governance is the most significant factor that determines the quality of life that it can provide to its citizens. The most significant factor that determines the quality of a country’s governance is the integrity of its government institutions and policymaking processes. Compared to the United States, the integrity of Germany’s government institutions and policymaking processes is significantly higher. This is why Germany ranks higher in quality of life and has lower unemployment, less government corruption, more accountability over its national level politicians, higher quality regulatory effectiveness, and overall higher government effectiveness.
Germany vs. The United States. The following chart illustrates the comparison between Germany and the United States. I produced the chart from the World Bank’s Worldwide Governance Indicators database, which enables us to analyze various types of government performance data and compare the performance of national governments around the world across several dimensions.
Switzerland vs. The United States. I was originally thinking about Germany for this article, but it’s also interesting to visualize the quality of the U.S. Government compared to an even higher ranking government: the Swiss Government.
If we calculate the average difference between Switzerland and Germany in these quality of governance rankings (average difference is approximately 5%) and then multiply that times the $1 trillion figure from the article at the link below, we can estimate that, if the world was like Switzerland, we would all be at least $1.05 trillion richer.
Americans Would be Much Richer with a Government like Germany’s. The World Bank’s figures underestimate how much richer Americans, in particular, would be if the U.S. Government was more like Germany’s government. Imagine if . . .
- The U.S. Government did not spend $3 – 4 trillion on wars in Iraq, Afghanistan, and post-9/11 DHS security measures and at least $1 trillion (in 2016 USD) on other unnecessary wars since the end of WWII.
- The U.S. Government did not grossly overpay by hundreds of billions of dollars per year for pharmaceutical drugs and healthcare for Medicaid and Medicare because of special interest pressures to keep those costs high.
- The U.S. Government did not subsidize the fossil fuels industry with a perpetual military presence in the Middle East and provide hundreds of billions of dollars in annual tax breaks to fossil fuels companies because of pressure from special interest groups.
- The U.S. economy was not addicted to oil and the U.S. Government (in collusion with specific companies in the auto and fossil fuels industries) did not sabotage Thomas Edison and Henry Ford’s electric engine designs at the beginning of the 20th Those engines would have eliminated our dependence on Middle Eastern oil; avoided decades of war and terrorism; and enabled the U.S. energy sector to grow based on clean energy, and far more energy-dense and efficient batteries than are available today.
- The U.S. Government did not spend $500 – $700 billion per year on a sprawling military-industrial complex.
- The U.S. Federal Reserve truly was a “politically independent central bank” like Fed Governors claim and it did not capitulate to political pressures to monetize the national debt, bail out criminally negligent financial institutions, and perpetuate a monetary policy that literally steals your money through the evil of monetary inflation. (If you believe any inflation is good—even a little inflation—then your brain has been hijacked by the U.S. Government’s false economic propaganda.)
- Imagine if the U.S. Government (Insert many other economically wasteful abuses of federal government power here.) . . . .
A Revelation for Many Americans. Now we can see why both Switzerland and Germany beat the United States in many important quality-of-governance and quality-of-life metrics. This is an eye-opening revelation for many Americans who have never lived in Switzerland or Germany or in any of the other OECD nations that provide a higher quality of life, better infrastructure, and more job opportunities than the U.S. Government does for Americans. This is especially surprising for many Americans who have grown up in households that believe European countries are just a bunch of dysfunctional welfare states filled with incompetent and corrupt socialists.
Rational Policies Lead to Real Job Growth. One of the most significant manifestations of the high-quality governance in Germany is illustrated in the article at the link below.
In that article, we learn how Germany’s young adult population has one of the highest employment rates in the world because of the German Government’s more rational economic and labor policies (relative to the U.S.), which promote healthy collaboration between corporations and the education sector. This results in many more opportunities for young German adults to make better career choices and to learn the professional skills they need to be relevant and valuable to German corporations.
Real Economic Growth, Not Fantasy Growth. With such low national unemployment and high employee morale inside German corporations, it’s no surprise that the German economy has been growing faster than the U.S. economy. And the growth of the Germany economy is real growth, not the fantasy growth based on monetary heroin (“stimulus”) that we see from various U.S. Government reports that are constantly being revised to correct previously incorrect reports.
The U.S. Government’s Corruption. Given the U.S. Government’s poor corruption rating (compared to most other OECD nations) from Transparency International, The World Bank, and The World Economic Forum, it’s not unreasonable to wonder how much U.S. labor and GDP statistics are manipulated for political reasons. Specifically, the frequent revision of these reports may be (at least partially) due to the influence of powerful politicians who can put pressure on the U.S. Bureau of Economic Analysis and Bureau of Labor Statistics, especially during an election cycle, to make a particular candidate look more compelling to the electorate. There is no doubt that both Democrats and Republicans in Congress and the White House try to do this; whether they succeed in substantively distorting the data in these reports is almost impossible to prove, but it’s certainly not impossible for them to do.
The American Dream—Is it Just a Dream? Let’s dream of the future of American Democracy—a future in which politicians in Congress and the White House operate within an institutional environment that is substantially immune from special interest corruption like the national Governments of Switzerland and Germany. When that day comes, the Sun will rise again over America. But until that day comes, America will continue to descend into ever-darker days as more Americans suffer from increasingly fewer job opportunities and an increasingly lower quality of life. But we at least we can dream. . . .