Commentary

Whose Money Is It, Anyway?

This article originally appeared in Investor’s Business Daily.

Politicians of both parties take credit for balancing the federal budget. But the real credit goes to the taxpayer.

The budget is balanced only because Americans have generated more money than Congress has figured out how to spend.

In fact, federal spending has continued to climb, even in this Republican era of “downsizing.” Domestic outlays have jumped an incredible $300 billion since the GOP took over Congress in ‘95.

Most of the money isn’t going to the necessary tasks of government — such as judiciary and defense, which require collective political action. And most of the outlays aren’t obviously pork.

No, much of the new and growing government expenditures are grounded in “compassion.” Hundreds of billions are spent each year to show concern for the elderly, the sick, farmers and anyone else lobbying for a place at the federal trough.

Compassion is a powerful motivator because it trumps other arguments. A program may be inefficient and wasteful. It may discourage self-help and work, reward improvidence and carelessness and deprive others of money they have earned. But who wants to be uncompassionate, let alone look uncompassionate to voters, by saying no?


Since tax dollars are collected coercively, they should be used for public purposes, not private enrichment. And that includes programs justified as an act of charity. Making other people write checks is not compassionate. It’s extortion.


The problem with compassionate lawmaking isn’t that compassion is bad. The problem is that legislation is not compassion. There is nothing compassionate about giving away other people’s money.

For instance, in the midst of debating the potential impeachment of President Clinton, Congress took up a proposal to give $100,000 each to 7,200 hemophiliacs who contracted AIDS through the blood supply or their families. These cases are obviously tragic, but Uncle Sam didn’t provide the blood or warrant its safety. Why should taxpayers be stuck with the bill for a problem they didn’t cause?

The legislation faltered in the Senate because Sen. James Jeffords, R-Vt., believed it wasn’t generous enough. He wanted another 10,000 transfusion victims added to the proposed dole.

“These people deserve compensation,” he argued. But why from taxpayers?

The cost of this proposed gesture of “compassion,” about $1.7 billion, was cheap compared to that lavished on farmers, however. One of the few GOP achievements has been to dismantle some of the New Deal era farm subsidy programs — whereby Uncle Sam paid farmers to grow, and then not to grow.

The new system worked fine in good economic times. But now rural America is suffering. So, naturally, lawmakers rushed to throw money at farmers.

Congress approved a $4.1 billion welfare payment to people for no reason other than that they are farmers. At least the Republicans resisted Democrats’ demands to up the ante by another $3 billion and return to the good ol’ days of agricultural price supports. Again, why should taxpayers be expected to compensate agribusiness for a problem they did not cause?

Then there’s the 27-mile, $29 million Alaskan road through a federal wildlife refuge that will connect King Cove, an isolated Aleutian fishing village, to another town. “This road is about saving lives,” said sponsor Sen. Frank Murkowski, R-Alaska.

Critics suggested using helicopters to deal with infrequent medical emergencies, but there is a more basic point. Why should taxpayers across America be expected to subsidize people who choose to live in King Cove?

Countless other examples lard the budget: flood insurance, heating assistance, foreign aid, disability payments and so on. Many of the causes are good, but that doesn’t mean the federal government should fund them. It isn’t Uncle Sam’s money. Nor does it belong to Clinton, Newt Gingrich or the Congress. It’s the property of 270 million Americans.

Since tax dollars are collected coercively, they should be used for public purposes, not private enrichment. And that includes programs justified as an act of charity. Making other people write checks is not compassionate. It’s extortion.

If congressional Republicans really want to cut taxes, and President Clinton really wants to save Social Security — their current campaign mantras — they should cut spending, rather than increase it. But to do that, they must stop being “compassionate” with other people’s money.

Doug Bandow is a senior fellow at the Cato Institute and author of The Politics of Plunder: Misgovernment in Washington (Transaction, 1990).