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Dangerous precedents often set during wartime

As I See It

An overreaching and overspending federal government is one of the dangerous consequences of war.

And whether or not you believe that the United States is now involved in a long-term state of war against terrorism, as the Bush Administration asserts, the seriousness of the threats and challenges posed by terrorists is certain.

How officials respond to these threats and challenges in the near future will establish important precedents for the role government plays in the world and in our lives, businesses and homes.

A case in point, the U.S. Treasury is in a deficit-spending mode, which most economists think is acceptable during wartime. The spending is necessary to achieve an immediate but specific goal: defeat the enemy.

However, the so-called war on terrorism can never really be won. Terrorism is as old as human history, and the best we can hope for is to protect our nation, our people, and slow, hopefully stop, the spread and use of weapons of mass destruction.

And that takes us back to deficit spending: Are we setting precedents now that we won’t be able to pay for later?

Balancing compassion

with common sense

It didn’t seem appropriate to question governmental largess until we passed the first annual observance of the September 11th terror attacks. Without being insensitive to the families of the victims, it seems prudent to look at what the government has done to try and ameliorate their losses.

The danger here is creating the expectation that government can right all wrongs and heal all wounds, financial or otherwise. Hundreds of millions of private dollars have been raised to help victims’ families. Not to be outdone, the federal government has stepped in and pledged additional support averaging $1.6 million to each of the families.

American blood has already been shed in Afghanistan and a military conflict with Iraq is likely. And, there is no way to know what future terrorist acts might strike America.

The question is whether the payment to families of terrorist victims is a one-time thing or is the government becoming the insurance fund for all victims of terrorism and all other types of misfortune. Should anyone who can show financial loss even remotely related to the war on terrorism be entitled to government compensation?

Just look for a moment at the Social Security debacle. Informed Americans know that our demographic and longevity trends in conjunction with the rate of benefit payments will render Social Security insolvent. Too many people are getting too much money from too few. Social Security is a political minefield. Now that the ball is rolling, will victim compensation become a similar nightmare?

Proponents of the new federal Farm Bill have touted it as vital to national defense. Admittedly, being dependent on other nations for our food supply is not good for America. But subsidizing over-production of farm crops to allegedly protect the small family farms, which are disappearing at an alarming rate, and categorize it as national defense is a stretch. However, we now have it and we must pay for it — $190 billion worth of it.

And what about…?

While we are doling our money to victims of misfortune, there are other categories of victims that deserve our consideration. The attempts to gain reparations for the descendants of slaves come to mind. How about defrauded stockholders of bankrupt companies, the airline industry and the insurance companies who have been unfairly penalized with a devastating blow? The list goes on and on.

What do we expect from our national government? At what point must we admit that life is not fair and that there will be uncompensated bumps along the road?

America was formed by rugged individualists who risked life and fortune to birth a new nation. That tradition has served us well over the years and helped us weather national storms of all sorts. Will a soft, dependent, easily-victimized America fare as well in the future? Millions of people are envious of our freedoms and would revel in our downfall. Will we withstand the challenges or surrender the fight?

I think this is an opportune time to re-evaluate our expectations and accept that government can’t pay for all of our misfortunes. It’s easy to be lulled into thinking that getting money from the government doesn’t cost anything. However, all government payments come from the taxpayers.

That’s me. That’s you. And it’s up to all of us to decide what kind of people — and what kind of nation — we want to be.

Thought for the Moment — That government is best which governs least.

— Thomas Paine

Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at cpajones@msbusiness.com.


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