Interesting but Fundamentally Flawed
The Sixteen-Trillion-Dollar Mistake is an interesting, but fundamentally flawed book. Those who share the author’s ideological position (more on that in a moment) will find the book a treasure-trove of information to support their preconceptions. Most people, however, will be hard-pressed to wade through the tome’s biased economic misconceptions.
Jansson starts out innocently enough, writing, “I began this research with the suspicion that Americans had made numerous errors in their priorities from the presidencies of Franklin Roosevelt through Bill Clinton.” Virtually any well-read American can point to government blunders in the allocation of resources, and from the book’s title, you might suppose that the author is about to pitch into the tremendous waste that we have seen in federal farm subsidy programs, housing programs, welfare, education meddling, and so forth.
But no–Jansson is a professor of “social work” at the University of Southern California, and his complaint is not with those familiar boondoggles. Instead, he is upset that our “national priorities” have not matched his utopian dreams.
In an interview distributed by Columbia University Press, Jansson was asked, “How can a non-economist, non-military expert, non-budget expert intelligently criticize budget decisions of various Presidents and Congresses?” To which he answered, “To the research and recommendations of these experts, I have added value judgments.” Politicians, it hardly need be said, are not “experts,” but Jansson’s “value judgments” for the most part reflect a socialistic mindset that uncritically accepts the efficacy of government at solving “social problems” and looks askance at free enterprise.
As a long-time taxpayer activist, I believe that the money Americans earn is theirs to do with as they choose. Jansson’s view is just the opposite: “Failed priorities stem from misguided tax rates at excessively low levels, thereby depleting the resources available for military or domestic programs.” He grumbles that “members of Congress have often curried favor with voters by cutting taxes, even though they needed money to address domestic or international needs.” In short, what Jansson gives us is the old Galbraithian argument that we are starving the public sector by leaving so much money in private hands. The sixteen-trillion-dollar mistake, in his mind, is that the government hasn’t grown far bigger than it is!
Looking back into history, Jansson argues that FDR failed to raise taxes high enough to adequately fund the New Deal. “Historians often portray the New Deal as mammoth,” he writes, “but it had relatively few resources.” Jansson here is entirely oblivious of the well-argued case that the New Deal was a great hindrance to the economy’s recovery. He just takes it as an article of “liberal” faith that increased government spending would have done more to “stimulate” the economy and boost employment.
The author also echoes the jaded leftist cry that corporations are undertaxed. The problem here is that people who study the economics of taxation have generally concluded that the incidence of taxation doesn’t fall on corporations, but instead falls on customers, workers, and stockholders.
Jansson argues that higher taxes would give the government more revenues for all those programs that the left holds sacred–Head Start, Medicare, welfare, foreign aid, and more–while not affecting productivity. He thinks it a myth that high taxes stifle the economy and lead to rising unemployment, but never comes to grips with the argument of serious economists that by siphoning resources from the private sector, the government necessarily reduces industry’s ability to employ people and produce goods and services. It never occurs to Jansson to compare the economic performance of high-tax and low-tax nations.
Some of his complaints are well-taken, especially on corporate welfare, but others have done better work in identifying the waste.
There is little to be learned from this feeble book except that limited-government scholarship and basic economics still have not penetrated far into academia–especially schools of “social work.”
Donald Racheter is professor of political science at Central (Iowa) College and president of Public Interest Institute.