Spending Future People’s Money

(Don Boudreaux)

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In my most recent column in the Pittsburgh Tribune-Review I help to bust the myth that politicians can be trusted to look carefully after the long-run interest of the general public.  A slice:

Each elected official’s political lifespan ends at the next election. And a politician fast approaching his political death has little incentive to worry about matters such as government’s long-term solvency or the consequences 10 years from now of regulatory reform today. Costs and benefits that play out only over long spans of time are of little concern.

What is of great concern to the politician is today, the present, the here and now. The more the politician improves today’s state of affairs for his constituents, the greater are his chances of surviving politically past the next election. But improving today too often involves ignoring the future. This reality is why, for example, politicians love to spend borrowed money.

Most people whose taxes will rise in the future to pay off government debt when it comes due are not able to vote today. Yet all the people who reap the benefits of today’s spending can vote today. Because voters focus on today’s spending while largely ignoring its future costs, politicians have powerful incentives to spend as much as possible today and to pay for it with funds borrowed from future generations.

Likewise, a policy that promises immense and widespread net benefits over the long run will encounter stiff political opposition if its costs are immediate but its benefits take time to fully materialize.

In short, politicians are rewarded for behaving as if there’s no tomorrow.