Notes from FEE
DECEMBER 01, 1992 by HANS SENNHOLZ
Most Americans sense that something is wrong. They have an eerie feeling about the federal government spending hundreds of billions of dollars it does not have and owing a debt of trillions of dollars. After all, in their personal lives they learned very early that what they don’t owe won’t hurt them. He is rich who owes nothing. And they may have learned in their history classes what Thomas Jefferson said about government debt: “I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared.” And in a letter to a friend he wrote: “The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
The federal government obviously lives by fiscal principles which differ diametrically from those of our personal lives and from those postulated by Thomas Jefferson. We are quick to find fault with those principles and place the responsibility on the shoulders of politicians and officials whom we hold in low regard anyway. Unfortunately, we fail to search our own conscience which, if searched in earnest, would reveal our own responsibility and culpability. In fact, the majority of the American people is solely responsible for the federal spending predilection and the pyramid of trillion-dollar debt.
Although most people readily support reduction in federal spending, they balk at virtually every proposal of specific cuts. A nationwide poll conducted by the Wall Street Journal and NBC News, for instance, found that 86 percent oppose reductions in Medicare spending, and 69 percent oppose reductions on social spending for the poor. There are more than 90 million Americans who benefit directly from one or several transfer programs. They are unlikely to oppose the largess.
Many more Americans benefit indirectly. The retirement benefits of some 35 million beneficiaries lend aid and comfort to millions of young people who otherwise would have to assist their parents. The Medicare and Medicaid programs which finance the medical care of more than 50 million aged, disabled, and needy Americans benefit not only the recipients but also the families which otherwise would provide the medical care. The subsidies to some 7 million students benefit not only the students but also many more parents, relatives, and spouses who otherwise would provide the assistance. The federal government subsidizes more than 100 million meals per day, or 15 percent of all meals served, through food stamp programs, child nutrition programs, nutrition programs for the elderly, and commodity distribution programs. All the recipients are likely to object strenuously to any reduction in benefits although they all are moaning about the budget deficits.
The benefits received are concrete and visible; the harmful psychological, economic, and political consequences of the programs are hidden in the haze of popular notions and prejudices. It takes knowledge and reasoning to perceive that forcible transfer of income and wealth erodes individual character and morale, that it consumes economic wealth and lowers labor productivity and income, and weakens democratic institutions. It is a potent prescription for stagnation and poverty, and an open invitation for social and political conflict.
It is difficult to confront the entitlement system with economic arguments. They are utterly ineffective against passionate descriptions of human need and want. “We cannot afford it” is an invitation to instant rejection and ridicule. At its best, it initiates a search for funds which leads to ugly denunciations of people with funds.
To perceive the evil consequences of political largess requires a sense of morality and justice which must guide all our actions. The established rules of morality must be applicable to individual as well as political conduct. We must keep our promises, fulfill our contractual obligations, and respect the rights of property acquired under contract.
Above all, we must reject the notion that political action is not bound by the decencies of that code of law and morals which governs private conduct.
The present system of political entitlements and largess rests on a universal rejection of that code of law and morals. Our representatives in the Congress deal and wheel and engage in feverish logrolling in order to distribute and redistribute the entitlements. In a democratic society the only principle guiding their action is the majority vote. In all cases the will of the majority prevails; the minority which lacks the vote is likely to become its victim.
More than 200 years ago James Madison clearly foresaw the social and political conditions of our age. In a speech in the Virginia Convention in 1788 he declaimed: “On a candid examination of history, we shall find that turbulence, violence and abuse of power, by the majority trampling on the rights of the minority, have produced factions and commotions which, in republics, have, more frequently than any other cause, produced despotism.”
The destiny of a republic in which the majority thrives on entitlements forcibly extracted from minorities is despotism—unless the majority forgoes its numerical power and returns to the code of morals. The road ahead is clear. We may proceed in the old direction toward despotism or veer around and return to the proven ways of the republic. The choice depends on the moral attitude we adopt toward other people, especially the political minority. Morality itself is eternal and immutable.