A case to bind the spenders
WASHINGTON — The arguments against a constitutional amendment to require balanced budgets are various and, cumulatively, almost conclusive. Almost. The main arguments are:
The Constitution should be amended rarely and reluctantly. Constitutionalizing fiscal policy is a dubious undertaking. Unless carefully crafted, such an amendment might instead be a constant driver of tax increases. A carefully crafted amendment that minimizes this risk could not pass until Republicans have two-thirds majorities in both houses of Congress, which they have not had since 1871.
Furthermore, requiring a balanced budget would incite creative bookkeeping that would make a mockery of the amendment and the Constitution. For example, New York, which like 48 other states (all but Vermont) has some sort of requirement for a balanced budget, once balanced its by selling Attica Prison to itself: A state agency established to fund urban redevelopment borrowed $200 million in the bond market, gave the money to the state, and took title to the prison. The state recorded as income the $200 million its agency had borrowed, declared the budget balanced, then rented the prison from the agency for a sum adequate to service the $200 million debt.
There is, however, one sufficient argument for a balanced-budget amendment. It is: George Mason University’s James Buchanan.
This Nobel laureate economist, who died last month at 93, pioneered the “public choice” school of analysis, the premise of which is in the title of his 1979 essay “Politics Without Romance.” Public choice theory applies economic analysis — essentially, the study of how incentives influence behavior — to politics.
Public choice analysis began in the 1960s, when Washington’s social engineers were busy as beavers building a Great Society, and confidence in government reached an apogee that prudent people hope will never be matched. Public choice theory demystified politics by puncturing the grand illusion that nourishes government growth. It is the fiction that elected politicians and government administrators are more nobly motivated, unselfish and disinterested than are persons acting in the private sector.
Buchanan extended the idea of the profit motive to the behavior of politicians and bureaucrats, two groups seeking to maximize power the way many people in the private sector maximize monetary profits. Public-sector actors often do this by transactions with rent-seekers — private factions trying to maximize their welfare by getting government to give them benefits, such as appropriations, tax preferences and other subsidies.
Critics have dismissed as mere anti-government ideology the injection by public choice theory of realism into the analysis of collective action through politics. Such critics cling to a comforting — and, for advocates of ever-bigger government, a convenient — theory. It is that in politics and government, people, acting as voters or legislators or administrators, do not behave as people do in markets — they supposedly are not responsive to incentives for personal aggrandizement.
Actually, Buchanan’s theory supplanted an ideology — the faith in government as omniscient and benevolent. It replaced it with realism about the sociology of government and the logic of collective action. The theory’s explanatory and predictive power, Buchanan wrote, derives from its “presumption that persons do not readily become economic eunuchs as they shift from market to political participation.”
Concerning the cold logic of power maximization, Buchanan was as unsentimental as Machiavelli, whose “The Prince,” the primer on realism that announced political modernity, appeared exactly half a millennium ago, in 1513. Concerning the naturalness of self-interested behavior — its foundation in unchanging human nature — Buchanan stood in a line of thinkers that includes James Madison, the foremost realist among the cohort of realists we call the Founders.
Six days after Buchanan died, House Republicans provided dismal (and redundant) validation of public choice theory. Rep. Mick Mulvaney, R-S.C., supported by Majority Leader Eric Cantor and Budget Committee Chairman Paul Ryan, proposed offsetting just $17 billion of the $60 billion aid for victims of Superstorm Sandy, and doing so by cutting just 1.63 percent from discretionary government spending. Rep. Hal Rogers, R-Ky., chairman of the Appropriations Committee, said this would “slash and burn” important programs, and the measure failed because 71 Republicans opposed it.
The political class is incorrigible because it is composed of — let us say the worst — human beings. They respond to incentives of self-interest. Their acquisitiveness is not for money but for the currency of power, which they act to retain and enlarge. This class can be constrained, if at all, not by exhorting them to become disinterested but by binding them with a constitutional amendment.
George Will’s email address is firstname.lastname@example.org.