We argued in October that “regime uncertainty” was stifling the economy’s ability to recover. Businesses are more reluctant to invest or hire when Washington pursues a policy agenda that could be detrimental to their bottom lines. The phrase was coined by economist Robert Higgs who observed that FDR’s anti-business policies prolonged the Great Depression.
A Cato essay on special-interest spending explains how many federal programs deliver subsidies to particular groups of individuals and businesses while harming taxpayers and damaging the overall economy. A major reason why spending has spun out of control in Washington is that thousands of special interest groups have secured a slice of the spending pie, and they fight tooth and nail to make sure policymakers keep baking.
In a Washington Post article on the U.S. Postal Service’s continuing problems, Ed O’Keefe calls the USPS “a quasi-government agency enshrined in the Constitution but required by law to act like a business.”
As a fiscal wonk, I spend a lot of time digging through the federal budget looking at the spending trends in the biggest programs such as Medicare. But I’m often struck by the large amounts spent on the tiniest and most obscure activities. Eliminating any one of these tiny activities wouldn’t save much, but they are illustrative of a spending culture in Washington oblivious to the ongoing trillion-dollar deficits.