WITH THE COLD ^^R “over,”nsocial engineers are scrambling for then”peace dividend” — the bonanza ofncash expected to derive from a windingndown of military expenditures thatnhave been allocated to defend againstnthe Soviet military threat. Regardless ofnthe status of the Cold War and of thenSoviet threat, and that is by no meansnclear, surely defense spending will declinenin the next few years. The timesnare just that way. What shall we donwith the money?nOf course, there will be no “extra”nmoney to spend, since the federalnbudget has been operating at a deficitnof hundreds of billions of dollarsnthroughout the 1980’s. Our cumulativenfederal deficit is over $2 trillion,nalmost 40 percent of our annual productionnof goods and services, ournGross National Product (GNP). Theninterest payment alone on the federalndebt last year was over $200 billion.nThis is one federal expenditure that isnstrangling our country. But as anynsocial engineer worth his salt will tellnyou, it’s all a matter of priorities. It’snbetter to educate the ignorant andnhouse the homeless than to pay off thendeficit. After all, we’ve had a deficit fornmany years and survived, but if wendon’t upgrade our “human capital”nnow, we are going to spend more laternfor social services to help or house thenignorant, the unemployed, the needy,nand the criminal.nWhile our consciences are beingnpricked by this type of threateningnrhetoric, we would be wise to reviewnthe growth of government social welfarenexpenditures since 1950. Totalnsocial welfare expenditures, includingnsocial insurance, public aid, education,nhousing, and health care, came to $23nbillion in 1950, about 8.2 percent ofnour GNP. In 1987 government spentn$834 billion, about 18.8 percent of ournGNP. In other words, in 1987 wenspent 36 hmes more on social welfarenthan in 1950. Of course, our populationnhas grown, inflation has cheapenednthe dollar, and the economy as anwhole has grown. Nonetheless, thenamount of government spending onnsocial welfare as a percentage of GNPnCULTURAL REVOLUTIONSnhas increased almost 2’/2 times. Incidentally,nU.S. military expenditure as anpercentage of GNP went from 4.4npercent in 1950 to about 6 percent inn1987, with slight declines in the lastnseveral years. Soviet military expendituresnin 1989 were somewhere betweenn16 percent and 20 percent ofntheir GNP.nMost of the growth of governmentnspending on social welfare has been atnthe federal level. In 1950 federal socialnspending was $10.5 billion, about 3.7npercent of GNP, while in 1987 federalnspending leaped to $500 billion, aboutn11.3 percent of GNP. Federal spendingnon housing increased about 740ntimes, and spending on education increasedn100 times. Undaunted, mostnsocial engineers would say that despitenthis increase in government spending,nwe still have a higher school dropoutnrate, a greater decline in educationalnachievement, and an increase in homelessness,ndrug use, teen pregnancy,nviolent crime, etc. They would saynnow, more than ever, we need tonstrengthen the government programsnto deal with these problems.nThe facts suggest a simpler conclusion,nnamely, that government socialnwelfare programs have been counterproductive.nThey have increased overnthe last forty years the number ofnAmericans with psychological, social,neconomic, and even physical problemsnwho are now dependent on government.nThe actual beneficiaries are thengrowing armies of bureaucrats, socialnworkers, and suppliers who receive thensalaries, government pensions, andnpurchasing contracts to administernthese programs.nThe proposition that the growth ofngovernment has weakened the initiativenand sense of social obligation ofnour citizenry is validated by the experiencenof Eastern Europeans. They havenexperienced the realities of governmentsnthat promise free education, freenmedical care, full employment, inexpensivenhousing and transportation,nand guaranteed pensions. And yet thensuperiority of our democracy and freen0 I A S N OS ITnnnm, m mmnMAY 1990/5n