How to slash the state

I’ve spoken before (often!) about my belief that we need smaller government, limiting its functions to those that are both essential and Constitutional. Reason magazine recently published an article looking at what could be cut from current Federal expenditure, from programs to entire Government departments. I like their ideas very much! Here’s just one example from the article, out of fourteen points they discuss.

Unplug the Department of Energy

On April 18, 1977, four months into his new administration, President Jimmy Carter delivered a somber speech in which he declared the “moral equivalent of war” on the “energy crisis.” The centerpiece of Carter’s energy policy was the creation of a new Department of Energy (DOE), which would implement sweeping proposals to transform the way Americans produced and used energy. Just four months later, the new department, centralizing some 50 scattered federal energy agencies, was approved by Congress.

One of the chief functions of the department was to administer price controls on oil and natural gas. The DOE would also dispense billions of dollars in research and development subsidies aimed at jump-starting alternative energy technologies such as coal gasification and solar power.

So what about the DOE today? In 2010 more than half of the department’s $26 billion budget ($16 billion) was devoted to managing the federal nuclear estate, which consists mostly of facilities that make and dispose of materials used for nuclear weapons. The next biggest chunk of DOE funding, $5 billion, is targeted at that old standby, energy R&D. But payoffs on government-supported research have not been impressive. Three previous programs costing a couple of billion dollars failed to produce automobiles that ran on electricity (1992), hydrogen (2003), or gas at three times the efficiency (1993). And despite a total of $16 billion in subsidies over the years, solar electricity still costs between three and four times more than fossil fuel electricity.

Federal energy price controls were mercifully lifted in the 1980s. But the DOE continues to perform tasks better left to other players. Cleaning up after nuclear weapons is costly and will be necessary for a long time. Why not let the Pentagon handle that problem? Private-sector energy R&D is moribund because energy production and distribution is the most heavily regulated segment of our economy, but federal R&D subsidies have utterly failed as a substitute for competition and the lure of profits. If Congress and the White House must pursue the development of alternative energy via social engineering, a far more effective alternative to allowing DOE bureaucrats to pick technology “winners” would be a tax on conventional energy. The boost in energy prices would at least encourage inventors and entrepreneurs to get to work.

In 1982 President Ronald Reagan called for abolishing the DOE. The Republican congressional “revolutionaries” in 1994 promised to end it as well. As late as 1999, bills were introduced in the House and Senate to eliminate it. And yet the beast lives on. Thirty-three wasteful years after Carter’s speech, we’re still wasting energy (and money) on the Department of Energy. Enough is enough.

There’s much more at the link. Highly recommended reading . . . particularly for the next Congress! Also, if readers have any suggestions over and above the fourteen points Reason sets out (or if you disagree with any of their ideas), let’s hear from you in Comments.

Peter