As one who has spent his life seeking value for investors, I find that government has a very odd way of measuring success. A politician’s success is often determined by how much government money they can deliver to their constituents. As an example, multiple articles on a retiring Nevada senator praised him for his huge success at bringing federal dollars to the state for pet projects.
As the new legislative session approaches, various special interests are issuing the common plea, “we need more money.” In a recent article on education funding it was mentioned that Utah is last among all 50 states in per pupil spending, and suggested that Utah needed to spend more. Ironically, the article also noted Utah’s high test scores, high graduation rates, and the well-known high education levels of Utah’s workforce.
It occurred to me that if Utah’s education system were a private industry, it would be receiving the praise of the nation, rather than being ridiculed for its low spending. Other states would be lining up to send their delegates to Utah to learn how to run their own systems better. This attitude is common in private industry where companies are measured by how efficiently they can produce a great product, not by how much money they spend doing so.
So why this political talk in an article on investing? It is because the winds of change appear to be blowing across the mindset in Washington. Ford’s and Carrier’s recent decisions to reinvest in America indicates people are taking notice. The traditional attitude that government success is measured by dollars spent is being replaced with a more corporate approach where success is measured by results, and efficiency in obtaining those results is rewarded. If this attitude continues, if it spreads and if it is sincere, then I believe the benefits to our nation both financially as well as socially could be enormous.
Imagine a nation where states like Utah are praised for providing one of the nation’s best educations at the lowest cost, rather than being ridiculed for not spending enough money. People may argue about what government should do, but all agree it is inefficient and wasteful. With total government annual spending at all levels estimated to be over $6 Trillion dollars, imagine the economic impact if only a few percentages of better efficiency could be injected into the system. Such an attitude would translate down to greater efficiencies across the board, more corporate willingness to invest in America and a better economy overall. The results would likely be better production, higher profits and higher wages. This would benefit investor and employee alike.
Is the stock market fairly valued at current levels? If Washington is sincere in moving government towards a more efficient model, even in the smallest way, the benefit to our economy could be substantial and Wall Street may be only beginning to reflect that.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
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