In the private sector, there is always a test of success. The business must make a profit. It can sustain some losses, but the clock is always running on those. At some point, after all cuts have been made and costs are trimmed to a minimum, the business has to close shop. The summer of losses must become the autumn of profits, or else it’s all over.

Not so in government. Failing projects can go on forever. There is no profit and loss test. There is no test at all, in fact. Agencies like the Government Accountability Office (GAO) can blast away at a particularly egregious case of government waste, but hardly anyone pays attention. Congress has no reason to scrap it. No one does. Taxpayers have no means to pull the plug, because the whole thing is run outside their purview.

Continue reading at http://mises.org/story/3734

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