What's behind the funding of the welfare state

Legislative leaders — particularly, committee chairs — have lost power as Congress has become more porous and responsive to importuning factions using new media. Congress, responding to the increased difficulty of legislating, has delegated much lawmaking to specialized agencies that have fewer internal conflicts. Congress’s role has waned as that of autonomous executive agencies has waxed. The executive has driven the expansion of the consumption of benefits that are paid for by automatic entitlement transfer payments, by government-mandated private expenditures and by off-budget and non-transparent taxation imposed by executive agencies.

Government used to spend primarily on the production of things — roads, dams, bridges, military forces. There can be only so many of such goods. Now, DeMuth says, government spends primarily for consumption:

“The possibilities for increasing the kind, level, quality and availability of benefits are practically unlimited. This is the ultimate source of today’s debt predicament. More borrowing for more consumption has no natural stopping point short of imploding on itself.”

Funding the welfare state by vast borrowing and regulatory taxation hides the costs from the public. Hence its political potency. Until the implosion.