The Dangers of A “Helpful” Government

In August 1986 President Reagan famously quipped “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.” This quote is poignantly highlighted in Philip Hamburger’s 2021 book Purchasing Submission. 

Hamburger shows how the federal government uses bureaucracy to push through unconstitutional policies by promising government assistance and access in exchange for giving up our fundamental freedoms. He calls this the “transactional mode of control.” 

Two examples he provides are New York State’s version of Aid to Families with Dependent Children and broadcaster licensing from the Federal Communications Commission (FCC).

In the former case, New York state requires families participating in the Aid to Families with Dependent Children permit caseworkers into their homes to evaluate their needs (as well as inspect compliance). Programs such as these disproportionately erode the freedoms of the poor and trap many families in a cycle of dependence on the government.

In the latter case, broadcasters (both TV and radio) must apply for a license from the FCC. These licenses require broadcasters to comply with regulations that restrict freedom of speech to operate. Even though broadcasters are consenting to these restrictions, their rights are not null, and void. “The Constitution,” he comments “is a law publicly enacted by the people. It therefore cannot be altered or excused by the consent of states or private persons.” 

In both cases (as well as the myriad of other cases Hamburger discusses), the federal government has the force of law to punish those who receive funds and do not comply with regulations. In addition to simply clawing the money back, the federal government can impose “the force of law” to get people to comply, such as invoking the False Claims Act. Under the False Claims Act, the federal government “can obtain penalties and triple damages from person who recklessly make false assurances that they are in compliance with federal conditions.”

State and local governments, too, are subject to these stringent terms just as much as private actors. For example, the federal government requires states to raise the drinking age to 21 in exchange for highway funding. There’s also No Child Left Behind Act, which, despite only providing 8% of total state education funding, requires states to reshape their entire curriculum to fit federal standards in order to receive the money.

As my colleague Pete Earle and I discussed, dependence on federal funding has become an increasing problem. Federal funds have consistently been the second largest funding source of state expenditures since 1999 (and briefly held the top spot from 2020-2022). 

Of course, federal control over state and local governments is not absolute. Recent research shows that states used federal pandemic funding  to make contributions to public pensions and cut taxes despite the federal government banning pandemic funds from being used that way.

Hamburger closes the book with a “wake up call” for American people, especially the judiciary. He focuses on judges because, “the judges serve as the nation’s constitutional shortstop and have dropped the ball.” He emphasizes a need for judges to return to the original interpretation of the constitution and, in the final chapter, presents a guide for judges to assess federal programs.

When unraveling the administrative state, however, judges must also beware of pitfalls. If the terms and conditions of receiving funding are relaxed before these programs and administrations are terminated, we’ll see rampant waste, fraud, and abuse. This was clear during the pandemic with relaxed unemployment insurance requirements, resulting in at least $60.4 billion in fraudulent payments. Recent research also estimates that the federal government loses between $233 billion and $521 billion annually to fraud. The best way to avoid this danger is to end these agencies and programs altogether.

Of course, both the judiciary and the administrative state suffer from incentive problems. Success in government is measured by the number of people you have working under you and the size of your discretionary budget. The best way of maximizing those two is to increase the size and scope of your position in government. Those working for the government constantly look for new problems to solve. Doing so advances their career and gets the administrative state involved in everything under the sun. Hamburger does not provide a guide on how to overcome this incentive problem.

Nevertheless, Purchasing Submission is a must-read for understanding the pernicious nature of federal funding and the threat it poses to our freedoms and livelihoods. Hopefully the American people listen.