Thursday, November 25, 2021

Governments learn from the consequences of their mistakes

 If a firm makes a decision that increases costs or reduces quality, there are two immediate consequences: reduced sales as consumers turn to lower-priced, or higher-quality, alternatives; and a higher cost of capital, as lenders and investors turn to more profitable opportunities.  Product market competition thus aligns the incentives of a firm with the goals of consumers, and capital market competition, with the goals of lenders and investors.  

In contrast, if a government makes a bad decision, one that makes the state a less desirable place to work or do business, residents must wait until the next election, or move.  This kind of pressure is weaker and delayed, as it is costly and takes time to start over in a new state.  As a result, incentives for state government to better serve its residents are not as strong or immediate.

For example, Illinois has decided to under-fund state pensions for decades.  Its taxpayers now face a huge future tax burden, and the prospect of reduced government services, like police protection.  Current taxpayers are leaving because they can see a costly and crime-ridden future, and would-be taxpayers are locating in better-run states.  This kind of competitive pressure is slowly building and should eventually lead to reform.

However, if Democrats raise the SALT (State and Local Tax) deduction for federal taxes, other states will end up paying for Illinois' mistakes, shielding Illinois from the full consequences of its bad decisions.  This can only delay reform because governments, like children, do not learn from their mistakes, they learn from the consequences of their mistakes.  


  1. I have been Diagnosed with Hsv2 for some years,i did everything within my powers to see that i could get rid of it, Tried everything possible But all was in vain, I almost gave up cause i really tried my best i was scammed, lied to, forsaken, HSV2 became a threat to my life. On a very good Monday morning, I came across a contact of a Natural herbal healer called DR.USELU Online. I decided to contact and tell him about my problems and all that has happened in my past before meeting him. Behold he promised that everything will be fine and my problems will be solved, few days Later he prepared a natural herbal medicine which he sent to me and as i followed his instructions on how to take the herbs and how long i was going to take it (2 Weeks)....Today i am completely cured and free from HSV2 and my Life have been perfect since then. Pls , If you need his help, Contact him on email; or whatsapp:+2347052898482 you can also check his websites for more info about DR.USELU and be rest assured that you will definitely be cured as i was cured from HSV2 or any illness, cause he also taught me that there is no such thing as incurable disease. only the lack of will and that nature has given us everything we need to be healthy.

  2. Looking for Best Digital marketing course in Bhandup? I recommend you JiguruG as here we specifying the name of Best Digital marketing course in Bhandup. For More Detail Visit Here -