By Dan O’Neill

(Third In A Series)

In a democratic society, the government serves at the will of the people. The government’s budget, then, should reflect the people’s will with respect to spending and taxation.

Obviously, this is an idealization that glosses over the differences between the will of the majority and the will of the minority - to say nothing of the fact that in the U.S. the will of the majority must practically be expressed within the rubric of the political legacies of either the Grand Old Party or the party of Jefferson, Roosevelt, and Kennedy.

Still, over the passage of decades major swings in the federal budget tend to reflect major swings in the mood of the electorate, which in turn represents, however casually, the will of the people. What does the current budget say about the current national mood? About the current national consciousness and conscience?

In the first place, it shows a preference for private spending rather than public spending. The massive tax cuts proposed by President Regan in his first term and enacted by the Congress in 1981 remain essentially intact in the proposed 1986 federal budget. At the time they were passed there was a lot of hot air and smoke about supply-side economics and self-funding tax cuts -- cuts in tax rates which would induce such a massive growth of new effort and activity that the taxable base would expand by enough to offset the lower rate, leaving total taxable revenues unchanged. It is now obvious that while the economy’s response in 1983 and 1984 has been very strong - setting new records for an economic recovery -- tax cuts were far from self-funding. In fact, the tax cuts are undoubtedly the proximate cause of the current $200 billion federal deficit. But no matter. The electorate made it clear in 1984 that they prefer lower taxes to lower deficits.

What this means is that we as a people would rather have the money in our pockets (as individuals and corporations) than in the federal coffers. We would rather build office buildings and shopping malls than interstate and rapid transit. We would rather buy personal computers and video games for ourselves than give the money to the government to buy personal care for the elderly or war games for the military. We want more fast food stamps and less food stamps.

Is it bad? Not necessarily. The poor like to eat at McDonald’s, too, when they can afford it. The elderly like to shop at new malls when they are not ill. And the military has benefited greatly from advances in computer technology, which originated in the private sector.

President Regan and a majority of the American people follow the Jeffersonian principle that the government governs best which governs least. They feel that the government is not the answer to the nation’s problems but a necessary evil, an organization which is needed mainly for national defense and secondarily for those things which the government might carry out more effectively than the private sector, presumably few in number and narrow in scope.

Such a position is certainly tenable, having a long and honorable lineage in the history of ideas. It is also, like any idea or theory in political economy, somewhat flawed. No system is perfect, and any course of action invariably involves a tradeoff between the alternative benefits and penalties inherent in each approach. In the 1960’s, America embraced the “liberal” approach, seeking government solutions to social problems, welcoming government action and social engineering, and encouraging the best and the brightest to head for Pennsylvania Avenue, not Wall Street. Now all that is reversed. The best and the brightest are no longer advised to seek a career in government. A brief stint, perhaps, to straighten out bureaucrats, then head back to the boardroom and to the really important business of making money.

Making money, yes, and creating jobs. Private sector jobs. Not make work for dole, but potentially lucrative, upwardly mobile jobs. Or so goes the myth. A society is marked by its myths and its heroes, and right now the myth is of a glorious, unfettered private enterprise system and the hero is the yuppie. Our myths have a way of becoming partially real when we believe them. But because they can never be fully real we discard them when their shortcomings become too real, taking up in their stead some new myths (usually just old ones whose shortcomings we no longer remember or else feel are no longer relevant).

So the 1986 Federal Budget embodies the current national myth. We just might derive a lot of good from it. The myth of the sixties gave us the benefits of ending institutionalized racism, beginning space exploration, building the interstate highway system and encouraging a great flowering of the liberal arts. It also undermined individual responsibility, weakened moral and family values and diluted the strength of the military and civil authorities. The myth of the eighties can be expected to reverse some of the negatives of the previous myth but not without creating a few negatives of its own. The poor will find that they will be left more to their own devices. In some that will build character but for most it will mean a harder life than they deserve. Roads, transit systems, bridges, parks and public buildings will begin to erode, as will the morale of many a once-well-motivated federal worker. Individual responsibility will be strengthened (for those individuals who are not crushed by the weight of their responsibilities) and respect for morality and authority will revive.

Such is the will of the people, for now and, since this a democratic society, such is the current direction of government policy, reflected as usual in the outline of the federal budget.

(Dan O’Neill is a member of Christ the King parish, holds a doctorate in economics, and works in the financial planning department of a major corporation headquartered in Atlanta.)