by
Walter E. Williams

Recently
by Walter E. Williams: Should
Black People Tolerate This?

Our nation
is rapidly approaching a point from which there’s little chance
to avoid a financial collapse. The heart of our problem can be seen
as a tragedy of the commons. That’s a set of circumstances when
something is commonly owned and individuals acting rationally in
their own self-interest produce a set of results that’s inimical
to everyone’s long-term interest. Let’s look at an example of the
tragedy of the commons phenomenon and then apply it to our national
problem.

Imagine there
are 100 cattlemen all having an equal right to graze their herds
on 1,000 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 pursing 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.

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.

What
we’re witnessing in Greece, Italy, Ireland, Portugal and other parts
of Europe is a direct result of their massive spending to accommodate
the welfare state. A greater number of people are living off government
welfare programs than are paying taxes. Government debt in Greece
is 160 percent of gross domestic product. The other percentages
of GDP are 120 in Italy, 104 in Ireland and 106 in Portugal. As
a result of this debt and the improbability of their ever paying
it, their credit ratings either have reached or are close to reaching
junk bond status.

Here’s the
question for us: Is the U.S. moving in a direction toward or away
from the troubled EU nations? It turns out that our national debt,
which was 35 percent of GDP during the 1970s, is now 106 percent
of GDP, a level not seen since World War II’s 122 percent. That
debt, plus our more than $100 trillion in unfunded liabilities,
has led Standard Poor’s to downgrade our credit rating from
AAA to AA+, and the agency is keeping the outlook at “negative”
as a result of its having little confidence that Congress will take
on the politically sensitive job of tackling the same type of entitlement
that has turned Europe into a basket case.

I am all too
afraid that Benjamin Franklin correctly saw our nation’s destiny
when he said, “When the people find that they can vote themselves
money, that will herald the end of the republic.”

May
29, 2012

Walter
E. Williams is the John M. Olin distinguished professor of economics
at George Mason University, and a nationally syndicated columnist.
To find out more about Walter E. Williams and read features by other
Creators Syndicate columnists and cartoonists, visit the Creators
Syndicate web page.

Copyright
© 2012 Creators Syndicate, Inc.

The
Best of Walter E. Williams