The psychology of Washington, D.C.

Walter Williams, Professor of Economics at George Mason University and popular commentator, published an interesting column on the psychology of Washington, D.C. and why even conservative elected officials tend to get carried away in the current. Williams calls it the “tragedy of the commons.” Whenever things are owned in common (i.e., publically owned), there is a powerful impetus for each individual to sacrifice their own long term interests in favor of getting all they can now. Williams gives the analogy of 100 cattlemen who each have the right to graze their cattle on 1000 acres of commonly owned grassland:

The rational self-interested response of each cattleman is to have the largest herd that he can afford. Each cattleman pursuing similar self-interests will produce results not in any of the cattlemen’s long-term interest — overgrazing, soil erosion and destruction of the land’s usefulness. Even if they all recognize the dangers, does it pay for any one cattleman to cut the size of his herd? The short answer is no because he would bear the cost of having a smaller herd while the other cattlemen gain at his expense. In the long term, they all lose because the land will be overgrazed and made useless.

This, says Williams, is precisely the psychology that dominates Washington, D.C.:

We can think of the federal budget as a commons to which each of our 535 congressmen and the president have access. Like the cattlemen, each congressman and the president want to get as much out of the federal budget as possible for their constituents. Political success depends upon “bringing home the bacon.” Spending is popular, but taxes to finance the spending are not. The tendency is for spending to rise and its financing to be concealed through borrowing and inflation. Does it pay for an individual congressman to say, “This spending is unconstitutional and ruining our nation, and I’ll have no part of it; I will refuse a $500 million federal grant to my congressional district”? The answer is no because he would gain little or nothing, plus the federal budget wouldn’t be reduced by $500 million. Other congressmen would benefit by having $500 million more for their districts. What about the constituents of a principled congressman? If their congressman refuses unconstitutional spending, it doesn’t mean that they pay lower federal income taxes. All that it means is constituents of some other congressmen get the money while the nation spirals toward financial ruin, and they wouldn’t be spared from that ruin because their congressman refused to participate in unconstitutional spending.

We can see the road ahead, argues William, by looking at Greece, Italy, Ireland, and Portugal, all of which are spending more than their entire gross domestic product (GDP) to fund their governments, mostly due to entitlement spending. Greece, the worst, is currently spending 160 percent of its GDP.

Alan’s 2 cents

Greece’s government currently spends 160 percent of the country’s GDP. That is what economists, as well as every child who has operated a lemonade stand, call “unsustainable.” Lest you think that could never happen in the good ol’ US of A, consider that we are already spending 106 percent of GDP. As a result, our credit rating has been reduced from AAA to AA+, and our outlook, according to Standard & Poor’s, is “negative.” “Negative” is economist-speak for “we don’t think congress has the stomach to slash the entitlement spending that is sending us down the road to serfdom.”

What we need is principled politicians, right? Wrong. What we need is a principled citizenry, without which principled politicians are “unsustainable,” to the extent they exist at all. What is a principled citizen? One who is morally offended when their representative “brings home the bacon” and who resolves to ensure that that politician is “unsustained” at the next election.