“The President, a Republican no less, seems to believe that government should be telling us what kind of car to drive, what kind of education our kids should receive, how to cure disease in Africa and the Caribbean, how to liberate women the world over, how to fund technological innovation, and even how to ‘transform our souls’ and lift the ‘hopes of all mankind’ – all courtesy of the long-suffering taxpayer who is, once again, supposed to believe that the government can make better use of his money than he can.”

~ Lew Rockwell Jr., President of the Mises Institute

The State of the Union speech delivered last week showed little enthusiasm for the kind of real spending cuts our nation so desperately needs.  Instead, it outlined a federal budget that grows at a rate of 5 to 7 percent each year, and in the twilight zone of Washington this is deemed to show spending restraint!  Much of this lack of restraint will take the form of good old-fashioned welfare, whether for liberal social causes or conservative corporate causes.

Consider the call for hydrogen-powered cars.  The administration wants to spend more than $1.2 billion tax dollars promoting hydrogen research.  This is hailed as forward-thinking environmentally friendly policy, but really it’s just corporate welfare.  No one considers that certain companies and lobbyists will benefit handsomely from this new government spending, or that American taxpayers might prefer to keep the money for themselves.  If companies in the hydrogen industry get a billion dollars, what about other industries?  Why should government favor one industry or technology, and who in government is qualified to choose? 

A better approach would be to follow the Constitution and stop spending tax dollars on corporate subsidies.  Private sector research always works better than government-sponsored research, and it always produces more honest results.  If hydrogen power really works well, and companies can profitably provide clean running, affordable cars that people like, then the market for such cars will be tremendous.  In other words, if hydrogen cars are so great, they will become popular without government subsidies.  Why should the technology be developed at taxpayer expense, when future profits will be reaped by private companies?  Let the market, rather than the lobbyists, decide whether hydrogen-powered cars are the future.

The administration also wants to spend a whopping $15 billion in Africa to fight AIDS. Again, this is praised as compassionate and progressive policy.  But what about the people who are suffering here at home, whether from AIDS or other diseases, poverty, or unemployment?  Of course there is absolutely no constitutional authority to send tax dollars overseas.  It is unconscionable to tax Americans, especially poor Americans, to supposedly alleviate suffering in other countries. 

I say “supposedly” because the money never really helps, and almost always ends up in the hands of dictators, corrupt government officials, or thuggish leaders of local factions.  We could send $100 or $500 billion, and Africa would remain mired in AIDS and poverty.  Only freedom, property rights, capitalism, and the rule of law can help Africa. The AIDS crisis cannot be solved by government, but rather requires a combination of truly independent private sector medical research and politically incorrect prevention efforts.  Americans are the most charitable people on earth, and we should stop taxing them so much and allow private charities, including charities aimed at combating AIDS, to flourish.

The State of the Union speech provided stark evidence that the era of big government is hardly over, and that welfare has not been reformed.  Hydrogen boondoggles and AIDS industry welfare are just two small examples, symbols of what is wrong with a federal government that spends 2.4 trillion dollars in a single year.  Not only does government spend far too much of your money, it spends the money badly.  Once we as a society accepted the notion that Congress could fund programs not authorized in the Constitution, the sky was the limit – and we’ve reached that limit today.

February 4, 2003