With the Cold War “over,” social engineers are scrambling for the “peace dividend”—the bonanza of cash expected to derive from a winding down of military expenditures that have been allocated to defend against the Soviet military threat. Regardless of the status of the Cold War and of the Soviet threat, and that is by no means clear, surely defense spending will decline in the next few years. The times are just that way. What shall we do with the money?
Of course, there will be no “extra” money to spend, since the federal budget has been operating at a deficit of hundreds of billions of dollars throughout the 1980’s. Our cumulative federal deficit is over $2 trillion, almost 40 percent of our annual production of goods and services, our Gross National Product (GNP). The interest payment alone on the federal debt last year was over $200 billion. This is one federal expenditure that is strangling our country. But as any social engineer worth his salt will tell you, it’s all a matter of priorities. It’s better to educate the ignorant and house the homeless than to pay off the deficit. After all, we’ve had a deficit for many years and survived, but if we don’t upgrade our “human capital” now, we are going to spend more later for social services to help or house the ignorant, the unemployed, the needy, and the criminal.
While our consciences are being pricked by this type of threatening rhetoric, we would be wise to review the growth of government social welfare expenditures since 1950. Total social welfare expenditures, including social insurance, public aid, education, housing, and health care, came to $23 billion in 1950, about 8.2 percent of our GNP. In 1987 government spent $834 billion, about 18.8 percent of our GNP. In other words, in 1987 we spent 36 times more on social welfare than in 1950. Of course, our population has grown, inflation has cheapened the dollar, and the economy as a whole has grown. Nonetheless, the amount of government spending on social welfare as a percentage of GNP has increased almost 2/2 times. Incidentally, U.S. military expenditure as a percentage of GNP went from 4.4 percent in 1950 to about 6 percent in 1987, with slight declines in the last several years. Soviet military expenditures in 1989 were somewhere between 16 percent and 20 percent of their GNP.
Most of the growth of government spending on social welfare has been at the federal level. In 1950 federal social spending was $10.5 billion, about 3.7 percent of GNP, while in 1987 federal spending leaped to $500 billion, about 11.3 percent of GNP. Federal spending on housing increased about 740 times, and spending on education increased 100 times. Undaunted, most social engineers would say that despite this increase in government spending, we still have a higher school dropout rate, a greater decline in educational achievement, and an increase in homelessness, drug use, teen pregnancy, violent crime, etc. They would say now, more than ever, we need to strengthen the government programs to deal with these problems.
The facts suggest a simpler conclusion, namely, that government social welfare programs have been counterproductive. They have increased over the last forty years the number of Americans with psychological, social, economic, and even physical problems who are now dependent on government. The actual beneficiaries are the growing armies of bureaucrats, social workers, and suppliers who receive the salaries, government pensions, and purchasing contracts to administer these programs.
The proposition that the growth of government has weakened the initiative and sense of social obligation of our citizenry is validated by the experience of Eastern Europeans. They have experienced the realities of governments that promise free education, free medical care, full employment, inexpensive housing and transportation, and guaranteed pensions. And yet the superiority of our democracy and free enterprise roll off our lips so easily, even as the growth of our federal government supersedes and weakens private initiative, family integrity, local schools, charities, and communities. It would be ironic indeed if we did not see the lesson of Eastern Europe and apply it to our own society. It’s time to roll back the welfare state; it may be the only long-term method to help the needy.