False Profits: Rand Paul and Government Spending

How do you measure success?

Ask a fiscal conservative like Rand Paul, and he or she will tell you that success is measured in nothing but dollars. Rand Paul expressed this sentiment in the Senate when he suggested that the United States Postal Service should not be bailed out with government money.

“I always ask people would you like to buy the Postal Service?” Paul joked. Then he lamented, “If we could just sell it to somebody.” According to Paul, a public service should be completely privatized, or else abolished, simply because it isn’t making a profit.

Last time I checked, the purpose of a national Post Office is to deliver mail, not to impress shareholders. Paul claims to be a strict constitutionalist, and yet he ignores the fact that the Constitution’s Postal Clause doesn’t require the USPS to be profitable.

Paul acknowledged his idea would be politically unpopular. But his suggestion, that a public service as crucial as the Postal Service should be made into a private company, betrays his elitist attitude: Paul thinks that nothing is successful unless it is profitable. To him, unprofitable government spending always equals failure.

But Paul’s profit-first standard is really elitism of the worst kind. Privatizing or charging more for public services on the grounds of saving money is the worst thing a government can do.

For example, if the Post Office were privatized, many people would stop getting mail.

This is because it’s impossible to make a profit delivering mail to poor, rural areas. Costs outweigh the earnings to be had providing small towns or farms with this service. No private company would do it unless the residents of those places paid a fee to cover the costs. Requiring the Post Office to make a profit would mean extorting some Americans, or else cutting them out of the loop altogether.

If you don’t think a for-profit Post Office would be so cruel to the poor, let me recount the far crueler madness that goes on near South Fulton.

One year the City of South Fulton, Tennessee, was having trouble funding its fire department. The fiscally conservative state government refused to raise taxes to help South Fulton. The city didn’t want to raise taxes on its own people either. Consequently, the city decided that outlying rural areas would have to pay an annual fee if they wanted to keep their fire protection.

Two years ago, a rural man’s house caught fire. He had not paid the year’s fee. South Fulton firefighters showed up—and watched as his house burned.

Yes, really. The firefighters only came to protect the property of neighbors who had paid the fee. Though the poor man begged, the firefighters refused to help him; if they did help, they said, other poor people would stop paying the fee.

The rural man and his family lost their house and everything they owned. Their pets—three dogs and a cat—died in the flames. Another home near South Fulton suffered a similar fate in December last year. There’s no sign South Fulton will put humanity before profit any time soon. One might wonder if Rand Paul ever asks people whether they’d like to buy Kentucky’s unprofitable fire departments.

But let’s pretend for a moment that you don’t feel any empathy for the poor. What has profitless government spending done for you?

You’re a Mason student. Did you apply for any cheap federal loans? Be careful with your answer. According to a 2008 Cornell University study, 53% of students given low-interest student loans from the government claimed they have never benefitted from a federal program. Unless you were born into the Paul family and have thousands of dollars for an up-front payment every semester, you probably did.

Next time your economics-majoring friend complains about government spending, ask him if his family took out any federal loans. If he says no, ask him which iPhone app he invented to cover his $4,000 tuition.

The next time Rand Paul complains about government spending, remember that he’s really annoyed that poor and middle-class people are being helped without a concern for profit.

To be fair, not all government spending is helpful. The grossly inflated defense budget is one such expense. However, most fiscal conservatives aren’t complaining about this years’ $1.4 trillion defense budget.

Maybe the Libertarians are complaining, but they seem to think post offices, fire departments, and student loans are as wasteful as foreign wars. They measure success in dollars, so it’s probably hard for them to see a difference.