How’s Your Compulsory Holiday Giving Coming Along?

I wish people would perform the following intellectual experiment. Find out how much in federal taxes you have paid in the past year. Don’t worry about making any distinctions between the various payroll taxes and the income tax. It all goes into the same pot in the final analysis.

Now assume that this amount is in an account and that you are not allowed to spend any of it on yourself or your immediate family. Nevertheless, you are given a choice about how to spend it. What would you spend it on? Now compare that with what the federal government spends on. How do they match up?

How many of us would spend this money on:

  1. The Iraq War
  2. The War in Afghanistan
  3. Subsidization of other people’s mortgages (Fannie and Freddie)
  4. Prohibiting adults from smoking or otherwise ingesting marijuana
  5. Subsidizing agricultural businesses
  6. Sending arms to the Egyptian military
  7. The state budget of Israel
  8. Paying for the retirement incomes of people you have never met and know little about
  9. The budget of the Palestinian Authority
  10.  The abortions of the fetuses of strangers
  11. The imprisonment of non-violent drug offenders?

You can make your own list. The key to the experiment is to get away from the thought that this is the government’s money and really think of it as yours.

Now it is true that the experiment “evades” various collective action problems. But let’s us imagine that your allocation would provide a significant portion of whatever public good may be at issue.

What I am getting at is this. To what extend does government spending really reflect what you actually care about? Wouldn’t your allocations be more concerned with the people and conditions around you? Would they be devoted to problems, causes or people you really know something about?

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About Mario Rizzo 75 Articles

Affiliation: New York University

Dr. Mario J. Rizzo is associate professor of economics and co-director of the Austrian Economics Program at New York University. He was also a fellow in law and economics at the University of Chicago and at Yale University.

Professor Rizzo's major fields of research has been law-and economics and ethics-and economics, as well as Austrian economics. He has been the director of at least fifteen major research conferences, the proceedings of which have often been published.

Professor Rizzo received his BA from Fordham University, and his MA and PhD from the University of Chicago.

Visit: Mario Rizzo's Page

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