Thursday, November 14, 2002

The Politics of Spending-Tony Woodlief has a good pair of essays on libertarians. Here’s an early, thought-provoking paragraph in the second essay.
Most libertarians believe in some version of public choice theory, which suggests that government grows because state officials: 1) want more money, power, and prestige; and, 2) spread the costs and concentrate the benefits of government (except when targeting unpopular minorities). The latter insures that citizens will not oppose government, either because they are direct beneficiaries, or because the costs of organizing people to eliminate a particular program far exceed its cost to the individual. In short, libertarians largely accept the economic model of man as a rational maximizer of personal utility.
That last sentence is the key to the issue; voters will cast their ballots for the candidate that will provide governmental package that they like the most. Note that this may not be the package that will best line their wallet, but the package that gives them the most pleasure. If people are altruistic, they will want a government that gives the most overall pleasure; if they are selfish, they will vote for people who bring home the bacon for them in particular. The average voter is a combination, voting for both themselves and others in varying proportions and with varying priorities. Let’s look at three categories of government spending #1- True public goods-things that “everyone” benefits from and that are awkward to finance via the private sector. Examples: Military, police, public health, pollution controls, pure scientific research, most roads (bring it on, Mr. Haney). These often boil down to “how much” rather than “whether.” #2 – Subsidized private goods – Things that could be financed by the private sector but are paid for, in full or in part, by the public sector. Examples: Parks, NPR, Amtrak, expressways. #3 – Spending on favored categories of people. Examples: Social Security, Medicare, welfare, education, parents. A libertarian would be in favor of spending only in category one, and then only at a low level. Most conservatives nuke the items in category two, but the real big-ticket items are in category three. Let’s look at five questions that will help point out the issues involved with category three spending. #1 How much of a tax break should parents get? #2 How much should the government help the elderly with their medical care? #3 How much help should the government give college students? #4 How much should the government spend on K-12 education? #5 How much help should the government give to the poor? It’s unlikely that you answered “Zero” to all five questions. If you did, you are a serious economic libertarian. The rest of us stand charged with social engineering, using the government’s economic policies to reward certain classes or people or certain behaviors. We think that the country will be a better place if certain things get tax money, that the benefits of the spending outweigh the costs of the taxes. Yes, we’re guilty of social engineering; something more than a minimalist government might create a greater commonweal. For instance, parents get preferential treatment in the tax code, for they get an exemption for each kid they have. The population hawk (or militant childless person) might ask, “Why should we give you a tax break for breeding?” Because we, as a public, value children and want to get parents a lesser tax burden. We will debate how much to subsidize each kid and which parents to aid, but the basic concept of giving a lower tax burden to parents has been decided in the affirmative. We value our elders, giving them subsidized medical care and a bare-bones retirement income. We have an ongoing fight as to how to finance the retirement system and how generous the subsidy on the medical care should be and for what items, but we’re in general agreement on protecting and valuing our elders. We value education, giving our children a free K-12 education at government-run schools in order to (in theory, we’re working on the practice) turn them into productive citizens; to do otherwise would be to ask for a generation of undereducated adults that would be a great burden to society. We value a college education, but only give partial subsidies to everyone. We’re having a debate over whether to extend the financial help that currently goes to “public” schools only and give it to private schools as well. The debate is complicated by public school teacher’s unions not wanting the competition and by more secular individuals not wanting to lose kids to religious schools. However, the underlying idea of having government help pay children’s education bills has been agreed to by our society. We largely believe in helping the poor and that some government assistant in that area is called for. We have a large disparity of opinion as to how much help to give, what form should it be in, who should give it and how many strings should be attached to that help. However, we do have a broad consensus that such help should continue in some form. The hard-core economic libertarian will complain that we conservatives are not much different from the liberals; we both believe that redistributing wealth can be beneficial. However, conservatives and liberals will disagree on the efficacy of government and the damage of taxes. The conservative argument focuses not just on the benefits of these programs but the costs to the commonweal of the taxes needed to fund them. Those cost are from both the lost utility of the taxpayer and the economy-slowing effects of tax increases. People will tend to work and invest less when faced with higher taxes, thus slowing the economy and impoverishing everyone else a bit. People understand the problems of high taxes and regulations on an intellectual level but it sometimes doesn’t sink in deep enough to counteract the awwwww-inspiring rhetoric of the left. “What about the children? They are our future.”” Should we not have compassion on the least of these? “ “What ever happen to respecting our elders?” That’s why Democrats poll better the further away from an election they are; the more people think about economics, the better the free-market argument looks and the less bleeding-heart they are. Many small programs can get passed due to their small nature; if couched in the language of pennies a day per taxpayer, it sounds benign, but if you get dozens of these programs sneaking through, it becomes dollars a day in a hurry. To rephrase the old Dirksen line, a penny a day here and a penny a day there and pretty soon, you’re talking real money. Thus, we need to take a hard look at each program and ask hard questions as to how much help is actually being provided and whether that is worth the tax money needed to pay for it. Given the problem that most programs have with red tape and inefficiency, the burden of proof should be on the backers of the program, rather than have them plead “this is a rich country; we can afford to fund [insert pet project here].” The nature of personal utility makes creating a nice, neat formula next to impossible. However, taking a hard look at the real benefits of a program, being realistic about government’s ability to do things effectively and efficiently and knowing the downside of the taxes needed to fund the program will create quite a few more conservatives.

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