Public Good and the General Welfare

Our Exchequer’s excellent post on “Public Health and Public Trust” addresses the relative propriety of types of federal spending from the point of view of economics. It has me wondering whether this could help us identify and enforce constitutional spending limits.

Kevin argues that that “when government spends money, it should spend money on public goods.” This makes sense because, as Kevin explains, “public good” is a term with a fixed meaning in economics — it is a good that is available to everyone without exclusion and whose use by some does not deny it to others (e.g., missile defense and border patrol, but not entitlements).

This question of how Congress should spend money is different from, though closely connected to, the question of how Congress may spend money. As I’ve noted here before (see, e.g., here), Congress’s authority to tax and spend is limited — in theory — by the Constitution’s General Welfare Clause, found in the preamble to article I, section 8. Unfortunately, there has never been consensus on what “general welfare” means.

Hamilton claimed that it was essentially boundless — close to the “stuff that is good for the public” or “stuff that the public likes” that has gotten us into the debt hole where we find ourselves and that, Kevin points out, is not what “public good” means. Then there is the Madison/Jefferson interpretation that I prefer, which holds that the preamble’s reference to “general welfare” is not a standalone, general grant of spending authority but is limited by the specifically enumerated powers of Congress that follow in section 8, (The theory is that, besides being financially ruinous, a general grant of authority would have defeated the purpose of specifying — and thus limiting — what Congress was authorized to do with public money, so it could not have been what the framers intended). Finally, there is the Monroe middle position: “general welfare” is not limited to spending in furtherance of section 8′s enumerated powers but neither is it boundless; it must instead be “general” — meaning beneficial to all citizens, not to some at the expense of others.

I’d be interested to know what Kevin thinks, but it seems to me that “public good” is pretty close to Monroe’s construction of “general welfare” — the construction the New Deal-era Supreme Court seemed to adopt in United States v. Butler. The flaw in the latter, I believe history proves, is that “general” is such an elastic term (especially when complemented by jurisprudence requiring courts to accord congressional acts a presumption of constitutionality) that it is illusory as a limitation on Congress — we end up with Hamilton anyway (a fact that Hamilton himself recognized). Is “public good” just as elastic, or would its standing as a term of art in economics make it a more meaningful limitation on congressional spending?

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