Freeman

ARTICLE

What Is Government Waste?

Government Misuses Its Taxing Power to Demand and Command Wealth

JANUARY 01, 1994 by WILLIAM H. PETERSON

Filed Under : Government Spending

Dr. Peterson, a Heritage Foundation adjunct scholar, is a contributing editor of The Freeman.

Is the “waste tax” a tool for coming to grips with runaway federal spending? The waste tax is a newly advanced idea of Citizens Against Government Waste (CAGW), a non-partisan nonprofit Washington-based educational organization with 500,000 members led by syndicated columnist Jack Anderson and businessman J. Peter Grace of W. R. Grace & Company. CAGW sees government waste as a kind of an unlegislated tax—a heavy, counterproductive tax, in the hundreds of billions of dollars each year.

The waste-tax idea should generate discussion in America. Just how do you define government waste? How do you know it when you see it? Waste as a verb is defined in Webster’s Ninth New Collegiate Dictionary as “to spend or use carelessly . . . to allow to be used inefficiently or become dissipated.” But do these definitions mean that a government which is careful or efficient—admittedly unusual qualities in any government—cannot at the same time still be wasteful? Consider, for instance, the federal government efficiently computerizing its vast Social Security operations. Or serving as the benign protector of jobs by carefully stopping or impeding foreign goods at customs points in ports and terminals. No waste in either example?

CAGW’s case against government waste is well taken. Its waste-tax idea can provide a helpful public perception of the deficit problem. In the early 1980s Mr. Grace served as President Reagan’s chairman of the Private Sector Survey on Cost Control, popularly known as the Grace Commission. In 1984 the Commission came up with 2,478 cost-cutting recommendations, the implementation of which would have saved taxpayers an estimated $424.4 billion over three years and prevented the buildup of trillions of dollars of additional national debt by the year 2000. President Reagan pushed these recommendations but Congress permitted only some of them. So the waste tax grows.

But government itself has been growing in real terms and well beyond the rate of population growth ever since the New Deal, notwithstanding various attempts to leash this dangerous dog. The Grace Commission seems to have been modeled after two earlier Hoover Commissions. President Truman appointed ex-President Herbert Hoover to chair a waste-finding Commission on the Organization of the Executive Branch of the government in 1947-1951. And President Eisenhower named Hoover to head up a second commission for the same purpose from 1953 to 1955. Splendid studies made news as they spouted forth from both Hoover Commissions. But to little avail. Like Topsy, government just grows. And grows wastefully.

What is waste? Consider Milton Friedman’s Washington “iron triangle” of organized interests, affected bureaucrats, and overseeing legislators perpetuating all manner of wasteful schemes—schemes such as paying farmers not to farm, continuing to maintain military bases that the Defense Department itself says are unneeded, or spending “only” $500,000 to convert the North Dakota home of late bandleader Lawrence Welk into a national shrine (although Congress did back off that last boon-doggie after a public uproar).

Still, do the official and unofficial views of government waste go far enough, especially in the face of a $4 trillion national debt? Isn’t there guidance on waste in Thomas Jefferson’s thought that that government is best which governs least, in Thomas Paine’s thought that society performs for itself almost everything which is ascribed to government?

What Is ROGIS?

With 32 out of the last 33 federal budgets in deficit and virtually no prospect of getting a tourniquet on the ongoing hemorrhage of red ink, does it not make sense to at least contemplate getting hold of waste through not only cost-cutting and the waste tax idea but through a redefinition of government itself? At a time when government takes on program after program, with national health insurance looming, is it not time to discuss and tackle the proper role of government in society, the acronym of which is ROGIS (role of government in society)?

ROGIS should figure big in Washington, but it doesn’t. Is there a politician anywhere who asks: Why government in the first place? What is its purpose, especially in the light of the U.S. Constitution? Is it really the purpose of government to manage timber forests and “save” the spotted owl? To establish minimum wages and maximum hours? To achieve “balance” in the workplace in terms of representation by blacks, women, Hispanics, and assorted other groups? To look after small business? To care for the homeless? To institute rent control? To dispense pensions and medicine to the elderly? To issue food stamps? To run schools? To put up public housing? To foster, however inadvertently, an underclass? To aid the Hottentot and practically the rest of the Third World? To serve as a global policeman in a New World Order? And so on. Aren’t there alternative ways, including privatization, to accomplish these ends?

Waste is essentially a function of overblown government, of the state playing god, of being all things to all Americans, of misusing its taxing power to demand and command wealth—and thereby inevitably messing up, wasting resources, expanding the deficit.

So shouldn’t we talk up ROGIS and ask ourselves: Didn’t our Founding Fathers come up with a fine social compact of government, i.e., the checked and balanced U.S. Constitution, and try to seal its limited nature with the Ninth and Tenth Amendments? Weren’t these two strategic amendments largely undone especially in the twentieth century by liberal U.S. Supreme Courts who construed the Constitution as a “living document”? And isn’t there wisdom in the vision of Jefferson who, in his First Inaugural Address (1801), called for: “Still one thing more, fellow citizens—a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”

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