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Addicted to Spending

Posted By Don Boudreaux On February 23, 2007 @ 5:07 pm In Politics,Trade | Comments Disabled

Mark Schmitt [1] (HT: Greg Mankiw [2]) and Sebastian Mallaby [3] are just two of the many people who argue that Uncle Sam should increase the amount that he taxes American citizens.

Reasonable persons can (and do!) disagree over the appropriate role of government.  Some people want more of it, some people want less of it, and I suppose that some people think that the amount we have at the moment is just right.

But those who want more of it — or even those who want government to do more of some things and for government to do less of other things — seem to have a fetish for higher taxes.

I paste below a letter that I sent on Monday to the Washington Post in response to Mallaby’s column that ran that day:

Even if Sebastian Mallaby is right that government programs – such as efforts to retrain workers – are justified as the price to pay to weaken political resistance to freer trade, he’s wrong to argue that these programs must be funded by higher taxes (“Matching Free Trade With Taxes,” Feb. 19).

Uncle Sam today takes from Americans’ pockets more than $2.5 trillion per year.  In real dollar terms, this sum is 50 percent higher than what Bill Clinton’s government took during its first year in office and 25 percent higher than what George W. Bush’s government took during its first year.  Surely, Uncle Sam already has on hand more than sufficient funds to pay for whatever programs are needed to mute opposition to trade.

Sincerely,
Donald J. Boudreaux

Why doesn’t Mallaby — who is sensible, smart, sober, and informed — think to call instead for getting the revenue (to pay for the programs he endorses) from elsewhere in the budget?  Is it plausible that the country needs Uncle Sam now to spend nearly $3 trillion annually?  Why not call for eliminating farm subsidies?  For ending the “war on drugs”?  For selling off what is valuable in Amtrak and scrapping the rest?  For privatizing the U.S. Postal Service?  There are lots of programs that are horrendously wasteful.  Funds for any programs plausibly worthwhile as a means of reducing political resistance to freer trade can be gotten by cutting or eliminating even just some of these other programs.  (Cato’s Chris Edwards, here [4] and here [5], details many ways for cutting Uncle Sam’s bloated budget.)

I recall this blog post [6] in which Neil Buchanan complained about the GOP being “addicted to tax cut politics.”  I’m sorry, but if there’s any fiscal addiction at work in Washington it is not one that keeps taxes falling; instead, the addiction is one that keeps spending rising.

Think about it.  I’m sure that Sebastian Mallaby can find in the federal budget hundreds of billions of dollars currently spent on programs that he believes to be wasteful or even downright unjustified — programs that, if anything, make Americans poorer and increase wealth inequalities.  The reason, I suspect, that he doesn’t think to seek to get the funds for more trade-adjustment programs by taking them from these unjustified programs is that he understands from the get-go that nearly all programs currently in operation have a kind of political sacredness.  They become almost immediately locked-in; each one becomes very difficult to kill.

Now that’s closer to an addiction than is the perfectly understandable desire of (most) people to want to keep more of their own money.

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URLs in this post:

[1] Mark Schmitt: http://www.washingtonmonthly.com/features/2007/0701.schmitt.html

[2] Greg Mankiw: http://gregmankiw.blogspot.com/

[3] Sebastian Mallaby: http://www.washingtonpost.com/wp-dyn/content/article/2007/02/18/AR2007021800904.html

[4] here: http://www.cato.org/pub_display.php?pub_id=1373

[5] here: http://www.catostore.org/index.asp?fa=ProductDetails&pid=1441277&method=search&t=&a=edwards&k=&aeid=120&adv=&pg

[6] this blog post: http://left2right.typepad.com/main/2005/05/the_never_endin.html

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