D. Dowd Muska


Limitless Government’s Hidden Beneficiaries

February 16, 2012

The Heritage Foundation has issued its annual examination of the “troubling and rapid increases in the growth of dependence-creating federal programs.” Using 1980 as a base year (i.e., an index value of 100), the think tank’s number-crunchers assigned 2010 a score of 294. Yikes.

Rolling the clock back further makes it clear that America has all but abandoned its once-common practice of families, friends, neighbors, religious organizations, and secular charities helping those in need. The Index of Dependence on Government’s estimated value for 1962 is a minuscule 19. In other words, reliance on subsidies for housing, rural/agricultural “services,” welfare, pensions, healthcare, and college tuition “has grown by more than 15 times” in the past half-century.

The neoconservative policy shop’s 32-page report makes for disheartening reading. But dependency takes many forms, and the epidemic of direct handouts shouldn’t obscure other ways our countrymen rely on the coerced kindness of strangers. The index skips several of the biggest welfare programs administered by government at all levels.

While Heritage tallies the burden of federal credits/deductions, grants, and loans for higher education -- at $169 billion, the price tag is “142 percent higher than for the 2000–2001 school year (inflation-adjusted)” -- a full depiction of taxpayer largesse is omitted. According to the U.S. Department of Education, in 2008-09, “public degree-granting institutions” burned through $273 billion. Less than 20 percent of that spending was covered by tuition and fees. Federal, state, and local appropriations delivered 54 percent of the revenue for government-run colleges. Should an impoverished, high-school-dropout waitress be taxed to support the B.A. of a twentysomething with a lawyer mother and physician father? It’s a question few are willing to ask.

In education, though, the really big money’s in primary and secondary schools, which had operating expenses of $506.8 billion in the 2007-08 school year. Tack on $65.8 billion for capital outlays, $15.7 billion for interest payments on debt, and $8.3 billion for miscellaneous costs. The grand total, most of which was supplied by state and local taxpayers, was nearly $150 billion more than Apple’s current market capitalization. Isn’t it time that all but the poorest parents pay for their minor children’s education? It worked awfully well in the early days of the Republic.

Close on the heels of the schooling superstructure is the military-industrial complex. Secretary of Defense Leon Panetta has asked Congress for a fiscal year 2013 budget of $614 billion. Washington’s empire-builders doubtless agree with the DOD chief that his department’s purpose isn’t protecting the nation, but “confronting aggression wherever and whenever necessary.” Such an irresponsibly vague mandate requires, in Panetta’s description, an army “of more than one million active and reserve soldiers,” a navy with “285 ships … that will remain the most powerful and flexible naval force on earth,” and an air force “that will continue to ensure air dominance.”

One wonders whom, exactly, Panetta’s warriors are defending us from. Nicaraguans? Nigerians? Nepalese? It’s clear that Islamic terrorism is a wildly overblown “threat,” and can’t be combated with conventional forces.

Nearly all U.S. “defense” spending is nonessential, but fedpols sure love their military bases, and the compensation the installations provide to reliably grateful voters. (Recall that Jessica Lynch, the Iraq War II POW whose capture and rescue was embarrassingly embellished by Pentagon propagandists, joined the Army because she couldn’t get hired by the local Wal-Mart.) 

Let’s not be too mean to the DOD. Many of Uncle Sucker’s bureaucracies are de facto jobs programs. NASA, one of the worst-managed agencies in the federal fleet, employs 60,000 contractors and nearly 20,000 civil-service workers. The Department of Transportation has 58,000 people on its payroll. (Amtrak has 19,000.) The Department of the Interior, overseeing properties that should be transferred to the states and sold to private landowners, employs 70,000.

The Departments of Commerce and Energy shower corporations with billions of dollars in corporate welfare. Similar subsidies -- a.k.a. “vital economic-development investments” -- exist at the state level. Yet as Michael J. Boskin notes in The Wall Street Journal, “Favoring key constituencies with taxpayer money … crowds out valuable competing investment efforts financed by private investors, and it warps decisions by bureaucratic diktats susceptible to political cronyism.”

In the mid-19th century, the French economist Frédéric Bastiat wrote, “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”

They live among us: Millions of hard-working, law-abiding citizens who owe their educations, and often their livelihoods, to the political process’s redistributionist free-for-all. They’re not implicated in Heritage’s dependency report. They should be.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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