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Home | Blog | "Who Will Pay for It?" is the Wrong Question To Ask Politicians

"Who Will Pay for It?" is the Wrong Question To Ask Politicians

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Tags Taxes and SpendingFiscal Theory

Election season is that magical time when politicians compete to see who can make the most outrageous promises to the voting public. Whether it’s healthcare, college tuition, or border walls, every candidate has a plan for turning the nation into utopia. The trouble is, utopias are expensive, and getting votes means convincing voters they can get paradise without paying for it.

In the current election, the candidate usually associated with promising “free stuff” is Bernie Sanders, but of course, all candidates rely on the same trick, just in slightly different ways. This is not a new trick, and many people see it for what it is.

Unfortunately though, many critics of “free stuff” tend to rely on only one question to rebut their opponents’ policy proposals: “But who will pay for it all?”

Now, this is a perfectly valid question, and one that cries out for serious answers (which tend to be lacking). However, focusing too much on the question of who and how to pay can also distract from more important problems, and such undue attention can even be twisted for political purposes.

In fact, “Who Will Pay?” (WWP) sometimes backfires on critics of free stuff, especially if it leads to focusing on funding new programs, and not on their true costs.

First, if we start by asking who pays, we can forget to ask what is being paid for. By emphasizing the basic problem of finding the money, we overlook the problem of whether new government programs will actually work at all, or whether they’ll in fact be wasteful and counterproductive.

Second, demanding to know who will pay assumes politicians are unable to come up with an answer. But what happens when they do? If so, critics must fall back on other arguments. For example, even though conventional fiscal solutions like higher taxes produce plenty of bad consequences, they can at least temporarily fund new programs. Claiming that we can simply “tax the rich” to pay for new utopias is certainly naïve, but it’s also an easy out for people trying to justify increases in government spending. It offers a tiny bit more nuance than just assuming everything is truly free, but that rebuttal is often enough to give the rhetorical ground back to proponents of government spending.

My point is that politicians always have answers to questions about how to fund new programs, however short-sighted they might be. They always claim to find the money somewhere: they don’t just find the piggy bank empty and say, “Aw shucks, there’s no money left, we’ll just have to cancel the plans for socialized medicine, free college, and the border wall.”

Third, the question of who pays focuses the public eye on the money costs of public programs, not their opportunity costs. Government programs do direct damage to the economy — usually to the people they’re supposed to help — but they carry hidden costs, too. In particular, they waste resources that could have been used productively by entrepreneurs. Sadly though, the wealth that could have been created by free exchange remains “unseen.” Making it visible is a task for anyone interested in promoting genuine peace and prosperity.

Fourth, WWP is a politically useful question. For example, candidates can use it to dismiss opponents’ political means without actually criticizing their ends. WWP is a non-committal denunciation that can be quickly forgotten when its users want to propose their own spending programs.

And of course, concern about money costs adds a veneer of economic credibility to a candidate’s economic plans. It signals responsibility and restraint, which are pretty much the last things the political system produces.

In fact, “who will pay?” is a standard talking point of conservatives because it allows them to masquerade as the fiscally responsible side of the political spectrum, an illusion they’ve carefully fostered for decades. WWP allows conservatives to pick and choose the programs they like, and to denounce the ones they don’t as too expensive, without ever addressing the goals of spending.

Because it doesn’t address substantive goals, WWP always leaves the door open to future spending on virtually anything, as long as the money can be found. And wouldn’t you know, it always seems to be found when conservatives are in control of the purse strings. Yet they’ve convinced many voters that there are actually practical limits on government spending, especially if conservatives are the ones who get to guard the public coffers. Yet by investing them with this responsibility, voters actually enable politicians on all sides to plunder them.

Economics is at its best when explaining how market ventures succeed and public organizations fail. This, in my opinion, is the most important turf to dispute, and it’s here that economic ideas are most devastating. This is especially true for Mises’s arguments about bureaucracy and economic calculation, which reveal the inherent problems in all public administration and spending. Unfortunately, we’re in danger of overlooking these insights if we focus solely on raising the money.

It’s vital to debunk promises of “free stuff,” but we often concentrate too much on the “free,” and not enough on the “stuff.” We need to focus on what politicians are trying to do, not just on how they’re going to come up with the money to do it.

Matt McCaffrey is assistant professor of enterprise at the University of Manchester.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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