U.S.'s Limitless Power to Spend
I make the case in chapter five, Private Property, that wealth creation is fundamental to individual freedom. As the government takes wealth away, personal liberty diminishes as a result.
I wrote chapter six, Power Restrained, with the U.S. in mind since that’s my home country. If you’re from another great country, I know you will find this chapter still worth reading.
The American Founders were concerned about protecting individual freedom and sought to constrain the government in two ways: its taxing authority and its power to spend.
The power given to the American government to spend wasn’t meant to be limitless. Promoting the welfare of the country had qualifications. Initially, welfare was qualified by mutual and general.
At the country’s founding, the government had virtually no power to raise revenue under the previous Articles of Confederation to fulfill its objectives, which included the mutual and general welfare of each State.
The said States hereby severally enter into a firm league of friendship with each other, for their common defense, the security of their liberties, and their mutual and general welfare (art. III; emphasis added).
The reason the Confederation had no power was because it didn’t have taxing authority. It could only make a request to each state for revenue. As a result of the week national government, a new Constitution was written giving the central government the power to tax people and commerce.
U.S. Constitution
The new document also has the objective of promoting welfare, but this time welfare is only qualified by the word, general. It leaves out mutual.
…to pay the Debts and provide for the common Defense and general Welfare of the United States (art. I, sec. 8, cl.1).
The reason mutual was left out is because the constituency had changed. They were no longer receiving revenue from the States, but were directly taxing people and commerce. Whereas previously, mutual welfare of each State was possible, mutual welfare of each citizen was an impossible standard.
Even so, the Constitution still qualified welfare to only general expenditures. It should have been recognized that general was applicable to each citizen just as mutual and general was applicable previously to each state.
It’s absurd to believe that spending revenue that only benefits one group of people qualifies as general welfare. For instance, giving money to a single congressional district as a payoff for their representative to vote a certain way doesn’t benefit every other district. It’s likewise absurd that wealth redistribution qualifies as general welfare because confiscating wealth away from those who have it obviously isn’t a benefit to them, but would be to the recipient.
General Welfare Has No Meaning
Even though the Founders sought to restrain the government’s ability to spend, the qualifier general no longer has any meaning. The U.S. Supreme Court has ruled that defining general welfare should be left to Congress and not to the Court.
As a consequence, Congress has unlimited power to spend as it wishes. It’s why the U.S. runs in the red and why it’s debt is over $30 trillion. What this means is that wealth redistribution cannot be stopped on the spending side. Congress can provide a basic income, pay off college debt and redistribute wealth as it wishes.
Despite the fact Congress can spend however it chooses, the ability to tax still does have some limits. Future posts will be about how limiting its taxing authority may yet save the country from one day slipping into socialism.