All Commentary
Friday, November 1, 1991

Book Review: The Culture Of Spending: Why Congress Lives Beyond Our Means by James L. Payne

ICS Press, 243 Kearny Street, San Francisco, CA 94108 •1991 • 221 pages • $24.95 cloth

Harry L. Hopkins, adviser to F.D.R., reportedly said in 1938, “We will spend and spend, and tax and tax, and elect and elect.”

Hopkins’ thought is masterfully mirrored in this work by political analyst James L. Payne. Payne, who has taught political science at Wesleyan, Yale, Johns Hopkins, and Texas A&M, is a research fellow at the Independent Institute in Oakland, California, and head of his own Sandpoint, Idaho, research firm, Lytton Research and Analysis.

Payne sees Congress as sinking in a whirlpool of “spend and spend” with the taxpayer drowning along with the Congressmen, with the nation and the media pretty much in the dark as to whys and wherefores, and with the aftermath of a long-ongoing spending orgy reflected in nine post-World War II recessions and a 90 percent drop in the value of the dollar in the last half-century.

One thing wrong, says the author, is the widespread belief in government efficacy. Most people and Congressmen believe that government can solve any social or economic problem that comes along. Call it faith in government omnipotence. For however misplaced that faith, Payne’s examples of government inefficacy, including the boomerang effects of farm subsidies and the War on Poverty, add up to proof positive of the bed rock incompetence and tragic human waste of the Welfare State.

Still, perhaps Payhe’s most surprising argument is his observation that blind faith in government has deep historical roots. Payne recalls what happened after 313 A.D. when Constantine made Christianity a lawful religion. Church leaders preached that rulers were always right and should be obeyed. As a reward, the government subsidized church leaders and carried out persecutions of dissenters on their behalf. The pattern repeated itself in the 16th century in the Geneva theocracy under John Calvin.

To be sure, modern separation of church and state has somewhat ameliorated the creed of government omnipotence. Nonetheless, the American clergy, apart from the American people, is hardly noted for its libertarianism. In any event, what the people and Congress ought to hear again and again is Payne’s refreshing opposite contention to notions of government efficacy: “Government makes problems worse.”

Similarly refreshing is Payne’s play on opportunity costs as a means of getting at the deep-seated idea that government money is somehow “free,” almost manna from heaven. This free-lunch dream helps explain the proliferation of Washington offices and high-priced lobbyists maintained by many states and cities. Governors and mayors want to be sure that they get their cut of the swag, from new post office buildings to “free” harbor-dredgings—not counting grants-in-aid to states and localities already running in excess of $100 billion year after year.

What to do?

Be wary of legalisms, says the author, noting how a Colombian constitutional provision for a balanced budget has long been blithely ignored by the politicians in Bogota. Similarly, he calls attention to our own Congressional Budget and Impoundment Control Act of 1974 with its creation of a watchdog Congressional Budget Office, all of which has come to naught in terms of arresting our ingrained culture of spending.

By the same token, Dr. Payne recalls George Bush’s 1988 campaign pledge of “no new taxes.” He also recollects the Gramm-Rudman-Hollings Act of 1985 that bravely promised a balanced budget by 1991. Alas, 1991 is here with more than $600 billion piled onto the national debt in fiscal 1991 and 1992, with that debt officially projected to exceed $4 trillion by December 1992. Our red ink runneth over.

Well, if legalisms aren’t the answer to undoing the spending culture, what is? James Payne’s main response is term limitations in Congress. He thinks senior Congressmen by fastening themselves into key committee chairmanships wield too much power. He cites 25-termer Jamie Whitten, chairman of the House Appropriations Committee, as a case in point.

The Payne response is welcome but it still leaves unanswered the power of legions of Washington lobbyists, armed with oodles of PAC (political action committee) money. Too, there’s the power of that unelected fourth branch of government, the bureaucracy, two-million strong, with highly influential tenured agency officials who survive one Administration after another.

I recommend this Payne book for its probing look inside dark fiscal closets atop Capitol Hill. Yet I wish he had expanded on his call for a “Second Madisonian Revolution.” For it takes two to tango: The problem is not just the free-spending, devil-may-care Congressman but, as the late Lem Boulware drummed into me, his freely receiving, vote-giving constituent or, by the same token, that constituent’s interest group, from the organized worker to organized farmer to organized teacher to organized veteran to organized doctor to organized lawyer to organized Hispanic to organized senior citizen to organized . . . what-have-you.

Our Welfare-State tango glides along to the beat of spend-and-spend, which means get-and-get, with the tax-and-tax part woefully forgotten or misunderstood under the seductive music of tax-the-rich.

The need, in sum, is education, essentially economic education on the iron law of no free lunch. Educational mission impossible? Let’s begin. There’s too much at stake.

Dr. Peterson, adjunct scholar at the Heritage Foundation, is the Lundy Professor of Business Philosophy at Campbell University, Buies Creek, North Carolina.

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.