The Golden Age of Groupon Government!

Revealed: Government keeps
growing because we’re purchasing it at an apparent discount.
Between 2009 and 2013, for instance, the federal government
borrowed 33 cents of every dollar it spent. That makes it seem as
if we’re only shelling out 67 cents for every dollar of government
goods and services.

Since 1974, when new budget accounting rules went into effect,
the government has paid out of pocket for just 84 cents per dollar
of spending, giving us all a sweet 16 percent discount. Who
wouldn’t buy more at those low, low prices? In my latest Daily
Beast column, I call this “The
Golden Age of Groupon Government.”

The idea behind Groupon is pretty simple: If you discount the
price of something, then people are more likely to buy it. While we
may not be willing to shell out $34 for artery-clogging amounts
of Cherry Garcia, Coffee Heath Bar Crunch, and Chubby Hubby,
we might sign on if the cost is just $17.

For decades now, we’ve been
getting much more government than we’re actually willing to pay
for. Which leads to…more government. About a decade ago, two Cato
Institute scholars—Peter Van Doren and the late William
Niskanen—reported on “Some Intriguing Findings About Federal
Spending.” Basically, they found that when the government
appears to charge citizens less money in the form of current taxes
and fees, people are happy to purchase more government.
“Controlling for the unemployment rate, federal spending [between
1981 and 2000] increased by about one-half percent of GDP for each
one percentage point decline in the relative level of federal tax
revenues.” Does anyone else remember a simpler, more parsimonious
America? “Gas, grass, or ass—nobody rides for free” is only a
bumper sticker these days….

At least with a Groupon deal, you settle your
bill up at the exact moment of the sale. Those heavily discounted
gallons of Ben & Jerry’s Ice Cream may give you a stroke, but
it’s not as if you—or your descendants—are still on the hook for
the other 50 percent of the purchase 10, 20, or 30 years down the
line. Yet that’s exactly where we are with Groupon Government: We
buy more than we can afford now, with no good idea of how we’re
ever going to pay up when the rest of the bill finally comes due.
Because if we’re lucky, we’ll be long gone before that day arrives.
As Keynes once quipped, “In the long run, we are all dead.”
You bet, but who’s paying for our funeral? And will they be paying
retail?

Read the whole thing here.