The article argues that current market borrowing costs are rising independently of the Federal Reserve's policy stance, challenging the assumption that the Fed controls all rates. Evidence shows significant increases in key rates—such as 2-year Treasuries and mortgages—even while the effective federal funds rate remains steady. This divergence occurs because market rates reflect complex factors like inflation expectations, credit risk, and geopolitical volatility, which are outside the central bank's direct control. Policymakers should therefore recognize that sustainable rate moderation requires credible disinflation and disciplined government budgets, rather than relying solely on Fed intervention.
Government Is a Leaky Bucket
English Summary
The article argues that federal government spending is fundamentally inefficient, likening the process to a "leaky bucket." The core finding is that every stage of raising and deploying funds—from taxes to program delivery—is undermined by bureaucratic inefficiencies, design errors, and behavioral responses. Consequently, the study asserts that most federal programs generate costs far exceeding their benefits across sectors like defense, welfare, and health care. Policymakers should therefore drastically reduce federal involvement, allowing resources and problem-solving activities to be handled primarily by state governments and the private sector.
中文摘要
本文論述聯邦政府支出本質上存在效率不足的問題，並將此過程比喻為「漏水的桶」。核心發現指出，從稅收徵集到計畫執行（program delivery）的各個階段，都受到官僚體制低效、設計缺陷和行為反應等因素的拖累。因此，研究主張，在國防、福利和醫療保健等領域，大多數聯邦計畫產生的成本遠超過其帶來的效益。本文建議政策制定者應大幅縮減中央政府的介入程度，讓資源分配與問題解決活動主要由州政府和私營部門來負責。
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