Freeman

ARTICLE

Public Policy Debate: The Rigged Game

OCTOBER 01, 1988 by JOHN SEMMENS

John Semmens is an economist with the Laissez Faire Institute, a free-market research organization headquartered in Tempe, Arizona,

By any measure, the federal government is growing at an alarming rate—the tax burden continues to soar, spending is out of control, and the fiscal 1988 omnibus appropriations bill included an incredible array of special-interest boondoggles. But isn’t this what the people want? Haven’t they voted for an ever-expanding government? Let us give the matter some thought.

The fact that the last general election saw 98 per cent of the incumbent members of Congress win re-election would appear to substantiate the contention that wastrel government is the will of the people. However, the success rate of incumbent legislators is not necessarily due to voter approval. After all, the success rate of in cumbent officers of the Soviet Union’s Communist Party is 99 per cent. What’s more, their voter turnout ratios are greater. Yet, We’d hardly tout such statistics as a manifestation of an obviously popular government.

This is not to say that American elections are no different from those of more authoritarian systems. At the same time, though, members of the American government do have certain advantages in slanting the public policy debate in favor of their own interests. Private citizens, on the other hand, are handicapped by critical disadvantages even in a society as open to free speech as ours.

Those on the outside of government are handicapped in at least three key ways. First, private citizens often have great difficulty in acquiring the information needed to wage a successful campaign against government policy. Second, private citizens are at a financial disadvantage in terms of the resources they can apply to the policy debate. Third, private citizens often must do baffle on the bureaucrats’ home turf.

Consider the matter of information. Proponents of increased government spending have people on the public payrolls working full-time to produce words, numbers, and pictures in support of their cases. Congressmen have extensive staffs to do their bidding. Furthermore, the bureaucracy itself is constantly generating reports, statistics, and presentations on behalf of bigger budgets, more appropriations, and new programs. All of this, of course, is financed out of public funds.

Meanwhile, anyone who would question the need for bloated government programs has tremendous difficulty. After paying taxes to fund the propaganda on behalf of increased government spending, he must find the after-tax resources to fund his contrary views. The facts he may need often are buried in the recesses of the bureaucracy. Information is concealed in obscure code-like jargon. Formats peculiar to the public sector obstruct a clear view of the most basic operational information.

Even someone well versed in private-sector accounting can have difficulty deciphering government budget and expenditure reports. Sometimes there is little accounting at all for how public funds are spent. For example, the General Accounting Office (Congress’s auditing arm) admitted that 80 per cent of the grants awarded by the Urban Mass Transportation Administration during the Carter Administration were not audited by UMTA. There was no verification of how the money was spent. This information, however, did not receive wide publicity. Subsidies to public transit still amount to billions of dollars each year.

Government employees who may be appalled by the waste they see around them are discouraged from communicating the knowledge to the general public. Complaints through official channels most often are ignored or suppressed. Sanctions and threats of sanctions are used to intimidate any inclination an employee may have to discuss the deficiencies of existing programs or policies. While much hoopla has been made of laws to protect government “whistle-blowers,” this protection is granted or withheld at the discretion of Congress. As a major participant in the waste of taxpayers’ money, Congress hardly can be expected to be sympathetic to insiders who would expose these schemes to outside scrutiny.

Ignoring Waste

Public hearings on government programs are little more than parades of self-serving supplicants. A few years ago, I appeared at a Senate Appropriations Committee hearing. My objective was to present evidence detailing the egregious waste of one of the multitude of transportation subsidy programs. I was appearing on my own time. My transportation was provided by a privately funded foundation. Mine was the only testimony that day which opposed the subsidies. Arrayed opposite me was a crowd of more than two dozen proponents of continued and expanded subsidies. Virtually every one of these witnesses appeared on behalf of some state or local government agency. The time and transportation of these witnesses were paid for by the same taxpayers from whom future subsidies were to be extracted.

Even when referenda are used to give a greater impression of voter control, the deck is stacked against the private citizen. Public officials call on the vast taxpayer-supported bureaucracy to create the appropriate data in support of the expanded government program. When these partisan undertakings are questioned, the ritualistic defense is that the activities are merely “informational” in character. Of course, the information may have been carefully selected and adjusted to remove any negativism or inconveniently contradictory evidence.

Citizens who oppose increases in taxes or spending must campaign with their own money—what’s left of it after taxes. Public law disallows the tax-deductibility of contributions to organizations whose activities are aimed at influencing public policy. The typical public issue controversy, then, sees money taken from the taxpayer to support lobbying for laws designed to take more money from him. Any defense against these raids on his income must be financed with after-tax dollars.

Even after private citizens win a battle against the expansion of government, the war goes on. The restraints achieved by a successful citizens’ effort almost always leave a core of the bureaucracy and the big-spending politicians intact. Work begins immediately—at taxpayers’ expense—on schemes to evade or reverse any restraints on government power.

New legislation to raise taxes or spending can be introduced at any time. Proposals voted down yesterday can be resurrected today. Sometimes the process is so rigged that a proposal can hardly be resisted, as in the case of local school budgets. If the budget proposal fails, it can be brought up over and over until it passes. Once it passes, the rules change—it cannot be repealed even if the voters change their minds.

The rationalization behind this one-sided procedure is the supposed need to protect public-sector budgeting from the contingencies of the electoral process. Left unstated is the possibility that the private sector could benefit from being relieved of the uncertainties inherent in repeated attempts to raise taxes. This is especially true for private-sector capital budgeting.

The more routine functions of government appropriations take place when the legislature is in session. The offices of the recipient government agencies are likely to be conveniently located near the legislature. Private- sector businesses and individuals, on the other hand, are dispersed across the nation. It is relatively easy for the public-sector bureaucrat to drop in on legislative hearings to offer support for his agency’s budget. It is a lot less convenient for the average citizen to make the trek from home or business to the law-making arena, especially when he must do it on his own time and at his own expense.

Clearly, the claim that the will of the people prevails in government is, at best, an unsubstantiated boast. From a scientific perspective, of course, we cannot rule out the hypothesis that government is operating as the majority of the citizens wish. However, examination of the • way the system actually works lends credence to the idea that government may not be closely adhering to the consent of the governed.

The fact that the policy debate game is rigged is cause for concern. But the fact that the proponents of bigger government have to resort to rigging to bolster their chances is also cause for encouragement. The fear that an unrigged game would undo big government is a backhanded validation of the strength of ideas, logic, and integrity. In the long run, such strengths should prevail over the tricks and stratagems of the rigged game.

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October 1988

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