Comment 26031

By A Smith (anonymous) | Posted July 21, 2008 at 14:02:47

Ryan, I agree with you that "common sense" often results in poor outcomes. Since we tend to only look at the primary effect of our actions, we are confused when secondary effects undo the desired outcome we are trying to obtain.

As an example, when government tries to protect its citizens by regulating gas prices, they only focus on the primary effect they are trying to obtain, cheap gas. However, since production costs can no longer be passed on to the end consumer, oil companies reduce production, and the result is gas shortages.

Free highways are another example of this, since the marginal cost of using them are zero, there is a great incentive to do so. The result is a large demand, and a perpetual smaller supply, which leads to traffic congestion.

That is why I continue to believe that Hamilton requires less government help, and more self reliance. Common sense tells us that government help is a good thing, however, it also creates a dependency on the politician for all the answers.

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