Friday, December 27, 2013

Jacob G. Hornberger: Why federal spending continues to soar

  The Washington establishment, not surprisingly, is celebrating the budget deal that Republican Rep. Paul Ryan and Democrat Sen. Patty Murray reached. They’re calling it a great example of "bipartisanship."

  And why not? The deal calls for increases in federal spending, doesn’t it? What’s not to like about that, from the standpoint of the Washington establishment?

  Pay no mind to the fact that the feds continue to spend more than they collect in taxes and that the mountain of federal debt continues to soar. Just keep spending and borrowing like there was no tomorrow. Everything will be fine. Just like it is in Greece and Detroit.

  So, why do these people, both Democrats and Republicans, engage in this type of conduct when surely, deep down, they know that this is not a good fiscal road for America to be traveling.

  The answer is that there are real live people who are at the receiving end of every bit of all that federal spending. Every one of those dole recipients fights viciously for the continuation of his money and even an increase of it. This occurs on the welfare-state, regulated-society side of things as well as on the warfare-state side of things.

  We’re not only talking about grants and subsidies to people, contractors, and communities but also salaries for the vast number of people who administer the programs. There are also all the side businesses that have become indirectly dependent on the federal dole, such as bars and loan sharks near military bases. No one wants to let go of his particular dole and every single dole recipient thinks that his particular share of the largess is the most important part of federal expenditures.

  The problem is that congressmen simply can’t say no, either to welfare-state beneficiaries or to warfare-state beneficiaries. The beneficiaries are simply too powerful, much more powerful and influential than the congressmen themselves.

  For example, if a military program is targeted for a reduction in spending, the military immediately goes on the attack. The military spreads the word that reductions in military spending will impact military bases and contracts in various parts of the country. People in those congressional districts, especially the news media, are notified. People across the country mobilize to complain to their congressman that their jobs, businesses, and income are going to be adversely impacted by the reduction in military spending. Congressmen inevitably buckle under the pressure.

  Sometimes the reason that congressmen can’t say no is financial. The beneficiaries of federal largess make extremely generous campaign contributions during election time, so that they can’t be accused of buying the votes of congressmen after the election. Everyone knows though that the donations have a predictable outcome. The congressman feels beholden to his major donors and, therefore, can’t help but say yes to continuing their largess. Moreover, the congressman knows that if he votes to cut off the largess, the beneficiary won’t donate to his campaign next time.

  Consider, for example, subsidies and privileges for the sugar industry, as detailed in a recent article in the Washington Post. In an era of out-of-control federal spending and debt, wouldn’t you think that ending sugar subsidies would be as easy as, say, ending foreign aid to overseas dictators?

  Not so. According to the Post, "the program, which has existed in various forms since the Great Depression, uses an elaborate system of import quotas, price floors and taxpayer-backed loans designed to prop up domestic growers, which number about 4,500."

  4,500? Out of 300 million people? What gives with that?

  Well, the answer might lie in campaign contributions, big ones. The Post states:

     The industry doles out generous campaign contributions that outstrip those from other agriculture sectors. Its leaders have forged personal ties with senior lawmakers, congressional staffers and high-ranking officials in the executive branch.

  In fact, according to the Post this small faction of people on the sugar dole were even able to overcome opposition from such large candy makers and food manufacturers as Hershey, Mars, and Kraft, who, along with American consumers, would benefit from lower sugar prices.

  The victims in all this loot-and-largess process are American taxpayer and consumers, especially young people who are having a difficult time starting out in life. They are the ones who are being plundered and looted so that the privileged class of people in the welfare and warfare sections can continue living high off the hog.

  Paraphrasing Frederic Bastiat, the federal government has become a great fiction by which a privileged class of people live at the expense of those who are working hard to sustain this gigantic, voracious, ever-growing welfare-warfare monster.

  One possible approach is to continue battling over each budget deal and each federal program but, as we see, that’s doesn’t work too well.

  The better solution is for the American people to raise their vision to a higher level, similar to what our ancestors did with respect to religion. Just as our ancestors constitutionally prohibited the federal government from giving subsidies to religious groups, modern-day Americans should expand that constitutional prohibition to encompass everyone else.

  About the author: Jacob G. Hornberger is the founder and president of The Future of Freedom Foundation.

This article was published by The Future of Freedom Foundation.

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