Government Spending Hurts People


We should not accept the statist premise that most government spending helps people. Government spending is not just wasteful or inefficient, but all too often serves to crush the private economy and individual freedom.

In the coming days the media will provide a constant stream of purported victims of spending cuts. But for every victim of cuts there are victims of government spending itself. There are people who lost their businesses because of overzealous federal bureaucrats, who were trapped in dependency and despair by welfare programs, who were forced to pay higher bills to enrich the crony friends of politicians, and who lost their jobs because the government favored a competitor.

Consider Mike and Chantell Sackett, who purchased three quarters of an acre in Idaho to build a home, only to be told by federal bureaucrats that they would be fined $75,000 a day if they proceeded and were entitled to no due process. “Bullying – that’s what the EPA does,” said Mrs. Sackett. “They came into our lives, took our property, put us in limbo, told us we can’t do anything with it, and then threatened us with fines.” They had to go all the way to the U.S. Supreme Court just for the right to appeal the arbitrary decision by federal bureaucrats.

Or Dan and Rachel Allgyer, the Amish couple who were forced to close their small Pennsylvania dairy, Rainbow Acres Farm. The Allgyers sold unpasteurized milk, which is apparently such a serious crime that federal agents at the Food and Drug Administration conducted a sting operation, then an armed raid, and eventually sued the Allgyers into oblivion after they tried to reorganize as a cooperative.

Or consider all the farmers suffering in California’s Central Valley because just a few weeks into the year, federal bureaucrats at the U.S. Fish and Wildlife Service decided that too many Delta Smelt have been pulled into water pumps. The current water restriction was enough to grow about $1 billion of fresh fruits and vegetables. This year is already shaping up to be a lot like 2009, when Delta Smelt-related water restrictions devastated the fertile region economically and drove up produce prices nationally.

Every day Americans from all walks of life deal with petty tyrannies and worse from federal bureaucrats. And the economic costs of complying with all the rules and regulations are staggering. Wayne Crews of the Competitive Enterprise Institute estimated than in 2012 federal regulation imposed economic costs on the U.S. economy in excess of $1.8 trillion.

An econometric analysis conducted by the Phoenix Center for Advanced Legal & Economic Public Policy Studies found that the average employee in a federal regulatory agency destroys about 98 private sector jobs per year. So furloughs or layoffs of federal workers as spending is cut are almost certainly saving a much larger number of private sector jobs from regulatory mischief.

It’s not just spending on the regulatory bureaucracy that hurts people. For decades prior to the landmark 1996 welfare reform the old Aid to Families with Dependent Children entitlement served to prevent economic mobility and foster a culture of dependency. That landmark reform did cut spending, but its greatest benefit went not to the taxpayers who saved money but to the citizens given opportunities to move off of welfare, into the workforce, and onto the ladder of upward economic and social mobility.

But AFDC was just one of 80 federal means-tested welfare programs, which now cost federal taxpayers about a trillion dollars per year while deepening the dependency trap. For too many Americans, living on the public dole indefinitely is tragically a way of life. They are victims, not beneficiaries, of government spending.

Properly conceived, spending cuts are not just about saving taxpayers and future generations from the burden of financing big government. They are also about protecting the American people from the predations of a federal government whose expansion into every aspect of our lives is causing direct economic and personal damage.

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