Washington's Penchant For Spending

January 31, 2001

The question of whether to use part of the projected federal budget surplus to pay down the nation's debt or for tax relief must be answered in light of the reality that if the money is left in Washington, it will be spent.

Comparing the records from 1940 onward, economist Alan C. Shapiro says that nearly every time revenue increases occured in one year, they were followed by spending increases the next.

  • On average, from 1940 to 1993, every $1 increase in revenues was accompanied the following year by an increase of 94 cents in spending.
  • The pattern was broken in 1994 -- the year the Republicans took control of the House of Representatives and the Senate from the Democrats.
  • But since then, the pattern has begun to reassert itself.

Advocates of limited government are under no illusion that either political party will be able to restrain its compulsion to spend. Only returning their tax money to the people will deny Washington the opportunity to spend it.

Source: Alan C. Shapiro (University of Southern California), "If You Send It, They Will Spend It," Investor's Business Daily, January 31, 2001.

 

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