During the debate last night, Neil Cavuto suggested that Ron Paul was contributing to the debt problem by securing earmarks for his district. I wrote about this issue when it first started coming up in 2007. The whole anti-earmark crusade is a trick; it’s goal has always been to convince people that they won’t have to give up any of their favorite government programs if we cut spending, and that is just not true. Funding Social Security, Medicare, Medicaid, and defense take up the vast majority of the annual federal budget. Significantly reducing the size of government will require cuts to these programs. In the scheme of things, spending $1 million dollars on a Woodstock museum amounts to little more than a rounding error in a budget that totals $3.3 trillion (it’s .0000000003% of the budget, in case you were wondering). Spending on all earmarks amounts to slightly more than three-tenths of 1 percent of federal spending.
But here’s the most important point–banning earmarks will not eliminate even this tiny fraction of the budget. Earmarks are provisions attached to appropriations bills that direct funds to be spent on specific projects, but they don’t affect the total size of the bill they’re attached to. That’s decided separately, based on the requests from the departments and agencies in question. In other words, by adding earmarks, Congress is telling executive departments how to spend the money they’re already giving them.
So if Congress is debating an $80 billion appropriations bill for, say, the Department of Transportation, and they decide to eliminate an earmark that directed $200 million to build a bridge somewhere, the bill’s total cost remains $80 billion. That $200 million will still be spent, it just won’t have any strings on it when the DOT receives it. They’ll be able to do whatever they want with it. Some argue that this is a better way to run the government, since executive agencies have merit-based selection processes, while congressmen simply try to buy votes. But, as I’ve argued before, there is ultimately no way for the state to spend money efficiently because the absence of market prices and the profit-and-loss mechanism in all government undertakings makes it impossible to accurately compare the value of inputs with the value of outputs. The idea that bureaucrats can distribute money more efficiently than congressmen is a hold-over from the Progressive Era, when the notion that “independent” experts and “public servants” could efficiently run society became widespread. But state planning in all its forms–legislative, executive, or even judicial–is chaos.
Those who remain fixated on this issue are misguided at best. To paraphrase Tom Woods, eliminating earmarks would be tantamount to changing how a dime is spent on a trip to the moon.
