The Three Types of Government Spending

U.S._federal_government_spending,_2010-2014Any objection whatsoever to some new, tax-funded government program elicits a consistent response from liberals or progressives. “You just don’t want to pay your fair share,” or “I guess we won’t see you driving on any of those government roads or calling the government police or fire departments.” The underlying assumption is that taxation is an all or nothing proposition. Either there is nothing that the government can collect taxes for or there is nothing that the government cannot collect taxes for. There are no principles upon which to base an answer to the question, “Is this a legitimate function of government?”

While there are probably thousands of different services that governments spend money on, they can generally be divided into three broad categories: security, public services, and wealth redistribution. Libertarians[1] argue that the only legitimate government spending is on security. Conservatives generally approve of security and some public services with their rhetoric while engaging in all three types of spending when in public office. Liberals generally endorse all three types of spending with both their rhetoric and their actions while in public office.

“Security” includes all government functions which attempt to defend citizens from aggression against their rights by other human beings. These would include the military, various police forces, and the civil and criminal courts. These are the functions of government whose purpose is to secure the individual rights of life, liberty, property, etc.

It is important to remember that even if these are legitimate functions of government, it does not mean that they cannot be abused. For example, a small suburban village in a low-crime area may not need more than the county sheriff for a police force, but may instead bear a tax burden of village, town, county, state, and even federal police forces. However, these debates revolve around how efficiently the services are being provided, not whether they should be provided by the government at all.

“Public services” generally refers to services provided to all members of society. What makes a service a “public service” is that it can be reasonably assumed that every member of the society has an equal opportunity to utilize it. Examples include roads, bridges, public libraries, garbage collection services, and fire departments. Libertarians argue that these are goods and services that the private sector can provide. Their objection to providing them with tax dollars is that those who do not consent to purchase them are still forced to pay. While this is also true of security services, libertarians acquiesce to those on the assumption that it would be impossible to exercise property rights without a government in place to defend them.

Certainly, a bridge between a new suburb and the city may improve commerce for the entire city. However, it is not necessary to protect anyone’s rights. Therefore, libertarians argue that those who want to build the bridge should provide the capital for it themselves and are perfectly within their rights to charge a fee to those who wish to use the bridge. Conservatives have traditionally argued that these services can be funded by the government and provided by private corporations under government contracts. Liberals generally support public services as well, although they sometimes object to them being provided by private firms.

Like security services, public services are prone to abuse and corruption, even if one accepts that they are legitimate functions of government. Public funds are often wasted on services that are not needed or services that are poorly rendered because they are provided by politically-connected government employees or private firms, rather than by the most qualified. Consider the “bridges to nowhere,” the roadwork construction projects that never end, or the multitude of scandals where it was discovered that $500 was spent on a single nail or some other gross abuse of public funds occurred.

The third category of government spending is wealth redistribution. Wealth redistribution collects taxes from one group of people in order to provide services to another group. What makes this type of government spending different from public services is the fact that the goods or services provided do not benefit all members of society equally. For example, health benefits under Medicaid are paid for by all taxpayers but are only available to people whose income is under a defined eligibility level. Thus, those funds are literally taken from one group and redistributed to another. Both libertarians and conservatives argue that this is nothing more than legalized theft, although conservatives have often led or acquiesced to expansion of this type of spending once in office. President Bush’s expansion of Medicare is one of the most recent examples. Liberals and progressives generally support this type of spending, arguing that it is each person’s moral responsibility to “contribute.”

In order to have an informed debate about a new government program, one must identify which category the proposed program belongs in. Too often the distinctions between these categories are blurred by both critics and proponents. Most often, a program that would properly be categorized as wealth redistribution is represented as a public service in an effort to persuade those that must pay for it that it is their civic duty to do so.

Read the rest at Euro Pacific Capital…

 

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

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6 thoughts on “The Three Types of Government Spending

  1. rdevans

    >Wonderful article that touches on issues that are largely ignored. I would like to add another critical factor justifying the original thinking. In the Federalist Papers it is discussed how every prior attempt at democracy had devolved into faction. Their defense of that weakness was equal, individual right. If such right is held supreme, then no faction could overwhelm.

    The "necessary and proper" clause of the COnstitution would suggest that their was a strong attempt to limit government to your first two catagories. Chief Justice Marshall emasculated that clause in Maubry v. Madison. In an extraordinary piece of specious reasoning, he asserted that if the founders really meant the clause to limit government authority, they would have instead used the phrase "absolutely necessary and proper".

    The second comment I have relates to corporation. Congress attempted to resist recognizing the corporate entity, perhaps understanding that it undermined the authority of equal, individual right. The advent of the railroads caused them to reconsider. US citizens were having trouble raising sufficient capital to participate in the construction, and by default foreign, especially the English, were getting the majority of the business. Alarmed, COngress caved. The evolution of the corporation provides a strong illustration of the evolution of faction. Corporations quickly amassed great powers, which became abusive towards labor. In response unions were formed to balance the inequities. The resulting factions seem to be the root of many of todays' problems.

    Lastly, I would like to point out the deliberate use of the Term "the people". This term emphasizes the importance of the individual as the unit of our government. In contrast the term "the Public" represents a faction – the majority as opposed to the individual. I believe that such a notion has greatly contributed to the undermining of our original understanding.

    THank you for your article.

    Bob Evans

    Reply
  2. Bud Wood

    >Good essay. Putting the three types of taxes in their respective boxes makes sense and clarifies taxation justifications. My compliments.

    Reply
  3. Mark Are

    >"This article mirrors how the Federal Reserve wants Americans to see their monetary system."

    ABSOLUTELY! The Founding Fathers gave us money that fit the definition of money. Some THING that was DURABLE, DIVISIBLE and had a STORE OF VALUE. When "they" stole the Constitutional system away from the people beginning at the time of Lincoln, they had to cover up the facts. And the main fact being that if THEY control our money, THEY control US. They don't give a damn about what we think or want because they have the control through the FED RESERVE SYSTEM. We are forced, for all intents to participate or not have electric, phone, gasoline etc.
    If WE started using some THING for money again so that WE THE PEOPLE were to control the money supply then THEY WOULD need our money to survive. We could as the 1st amendment guaranteed, petition for redress and if they refused to answer, remove our support and THEY couldn't eat. As it stands, we are SCREWED as long as THEY control the money through their printing press system and many will continue to "believe" that their "taxes" are actually paying for something when in reality they are their for the purpose of HIDING the fact of the FRAUDULENT system that enslaves us all. I can go along with Tom on a lot of what he says, but he can't possibly know it all and this article reeks of the ignorance he has on the subject of "money" and "taxes".
    Is suggest for Tom, the reading of A Caveat Against Injustice by Judge Roger Sherman, https://bornagainclassics.com/Books/ACaveatAgainstInjustice-Shermann/
    and A Plea for the Constitution wounded in the House of It's Guardians by George Bancroft. https://bornagainclassics.com/Books/PleaForTheConstitution-Bancroft/

    Until WE THE PEOPLE regain control of the money system, we are screwed. They will continue their robing, raping and pillaging of this country as well as the planet.

    Reply
  4. Tom Mullen

    >@ Mark,

    I agree completely about the insidiousness of the central bank and fractional reserve banking. I've written many articles and a whole chapter of my book about it. Here are just a few:

    https://thomasmullen.blogspot.com/2010/05/fed-audit-goes-way-of-tea-party.html

    https://thomasmullen.blogspot.com/2010/01/central-banking-doesnt-work-just-ask.html

    https://thomasmullen.blogspot.com/2009/10/michael-moore-wants-to-end-fed-he-just.html

    However, this article was focused on taxation, rather than the "silent tax" of inflation.

    Reply

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