ALEXANDRIA, VA — Government spending and government debt have
been skyrocketing. Under President George W. Bush, the debt reached
unprecedented levels. Under President Barack Obama, it has exploded
still further. Whichever party is in power, the government gets larger
and the debt increases.
Our political system, sadly, rewards big spenders. Every organized
special interest group in the American society — including farmers,
teachers, labor unions, manufacturers, Wall Street financiers, and
realtors — wants one form or another of government subsidization for
All of these groups have active political action committees, which
promise rewards for those who open the government coffers to them —
and penalties for those who do not. The incentive is clearly one-sided.
As Democrats used to say in the New Deal days, the way to electoral
success is clear: "Spend and spend, tax and tax, elect and elect." Republicans,
too, have learned this lesson. Since neither the Republicans nor the
Democrats is eager to antagonize voters by raising taxes to pay for
the extravagant spending, the budget deficits grow each year.
In May, for example, President Obama reauthorized the Export-Import
Bank of the United States, raising its lending authority 40 percent
to $140 billion by 2014. He acted one day before the 78-year-old federal
bank would have been shut down if he had not signed the bill. During
the 2008 presidential campaign, Mr. Obama called the bank "little
more than a fund for corporate welfare."
Despite President Obama's frequent criticism of corporate jets, the
bill includes $1 billion in subsidies for jet manufacturers, which
have experienced a steep decline in demand in recent years. Export-Import
Bank supporters in the business community — who pay lip service to "free
markets" but campaign vigorously for government subsidies — welcomed
the President's support. John Murphy, vice president for international
affairs at the U.S. Chamber of Commerce, said that the President's
action was "Great news for thousands of American workers and businesses
of all sizes." The National Association of Manufacturers — and
both Republicans and Democrats in Congress — supported the bank’s
Tim Phillips, president of Americans for Prosperity, described the
bank in these terms: "In (it's) nearly 80 years, the official
credit export agency of the United States has financed over $450 billion
in purchases. Ex-Im allows the federal government to pick winners and
losers in the market, and all too often, that leads to back room deals
and government cronyism.... It is a heinous practice that gives money
to a small number of politically connected companies while leaving
taxpayers with the risk.... The American taxpayer does not exist in
order to keep businesses from failing."
Republicans and Democrats are co-conspirators in this enterprise.
The incentive structure for both parties is precisely the same. Republicans
may talk of the "free market" and argue that Democrats are
against it, but both parties raise their funds on Wall Street and in
corporate boardrooms, and both parties have supported bailouts of failed
businesses and subsidies for others.
Voters say that they are against big government and oppose deficit
spending, but when it comes to their own particular share of the federal
pie, they act in a different manner entirely. This is nothing new.
Longtime Minnesota Republican Congressman Walter Judd once recalled
that a Republican businessman from his district "who normally
decried deficit spending berated me for voting against a bill which
would have brought several million federal dollars into our city. My
answer was, 'Where do you think federal funds for Minneapolis come
from? People in St. Paul?'... My years in public life have taught me
that politicians and citizens alike invariably claim that government
spending should be restrained — except where the restraints cut off
federal dollars flowing into their cities, their businesses, or their
If each group were to curb its demands on government, it would be
easy to restore health to our economy. Human nature, however, leads
to the unfortunate situation in which, under representative government,
people have learned that through political pressure they can vote funds
for themselves that have, in fact, been earned by the hard work of
This point was made 200 years ago by the British historian Alexander
Tytler: "A democracy cannot exist as a permanent form of government.
It can only exist until the voters discover they can vote themselves
largess out of the public treasury. From that moment on, the majority
always votes for the candidates promising the most benefits from the
public treasury — with the result that democracy collapses over a
loose fiscal policy, always to be followed by a dictatorship."
Hopefully, we can avoid fulfilling this prediction. It is an illusion
to think that such a thing as "government money" exists.
The only money that government has is what it first takes from its
citizens. Many years ago, Senator William Proxmire (D-Wisconsin) pointed
out that no one ever petitions members of Congress to "leave us
alone." Everyone who comes before Congress, he lamented, wants
something. Members of Congress — of both parties — have the same
incentive, to give each group what it wants to ensure support for the
future. The result is that government spending — and government debt
— grow relentlessly.
Unless we find a way to change this incentive structure, it seems
unlikely that we will bring government spending and deficits under
control. As the presidential campaign gets under way, neither party
is addressing this crucial question. Politics as usual, unfortunately,
will not help us to resolve the very real problems we face.
The Conservative Curmudgeon archives
The Conservative Curmudgeon is copyright © 2012
by Allan C. Brownfeld and the Fitzgerald
All rights reserved. Editors may use this column if this copyright information
Allan C. Brownfeld is the author of five books, the latest of which
is The Revolution Lobby (Council for Inter-American Security). He has
been a staff aide to a U.S. Vice President, Members of Congress, and
the U.S. Senate Internal Subcommittee.
He is associate editor of The Lincoln Reveiw and a contributing
editor to such publications as Human Events,
The St. Croix Review, and The Washington Report on Middle
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