Chapter dzǹ: Is Ļere a Bias Toward Overregulation? ȂȂȆand poorly understood but genuine government benefits expands. Public
goods do not enjoy the advertising that private goods do. Ļe average voter
is highly aware, however, of the costs of government programs as reflected
in his taxes. Catering to such voters, politicians hold taxing and spending
down to levels at which the benefits of additional spending would still
exceed the costs.
Several things are wrong with this argument. First, taxes are not all
that evident to the individual voter. Excise taxes are concealed in the prices
of products, and just which persons ultimately bear the burden of the cor-
poration income tax is even more obscure. Even personal income taxes can
be made less conspicuous by withholding. Downs does not take adequate
account of these tax concealments. He does not adequately recognize the
several distinct ways in which inflation can bring what amounts to hid-
den tax increases. He does not recognize how easy it is for government
to spend the incremental tax revenues generated by economic growth. He
does not take “fiscal illusion” seriously enough. Second, politicians have
discovered the beauties of deficit spending; and working as they do with
short time horizons, they do not agonize over an ultimate day of reck-
oning. Ļird, Downs gives only unconvincing examples of government
activities that have thin but widespread benefits, or benefits that are great
in the long run but unnoticed in the short run. In fact, his chief example
seems to be foreign aid. Although he notes the coercive nature of deal-
ings with government, he seems not to recognize that private activities
carried out with resources not taxed away might themselves have remote
benefits and that the coercive nature of the expansion of government activ-
ity makes that expansion less likely to leave a net excess of benefit over cost
than the alternative of voluntary expansion of private activity. He does not
recognize the differential incentives that special private interests have to
press exaggerated claims about the benefits of the government programs
that they are seeking.
Fourth, while Downs applies the approach of methodological indi-
vidualism to the voter, he does not apply it consistently to bureaucrats,
politicians, judges, and litigants. In some passages, he refers to “the gov-
erning party” or even “the government” as if it were a monolithic entity
making coordinated choices rather than an assemblage of individual per-
sons each working with his own drives, motives, opportunities, incentives,
constraints, and special point of view. He does not take heed of how
individual legislators or candidates can call for particular spending pro-
grams without calling for the taxes to pay for them. He supposes that each