The Sixteen-Trillion Dollar Mistake: How the U.S. Bungled Its National Priorities from the New Deal to the Present (review)

Among the virtues of this book are its strongly stated and well-documented argument-as indicated in the title and subtitle-and its clear description and analysis of how the national government develops its budgetary policies. Relying on a wide variety of sources, including archival materials from presidential libraries, Jansson looks at the spending and tax priorities of presidents from Franklin D. Roosevelt through William Jefferson Clinton. Federal bungling, he concludes, wasted $16 trillion in constant 1992 dollars ($18.46 trillion in 2000 dollars). The figure would be even higher, he argues, if it included losses to the government stemming from illegal corporate tax shelters and tax avoidance.

Jansson is a liberal who laments that the federal government did not use this $16 trillion for needed domestic spending, but he is almost as critical of liberals as he is of conservatives: Liberals have been far too slow to attack excessive spending for military purposes and for pork-barrel legislation, and much too timid about plugging corporate tax loopholes. Conservatives have relentlessly called for tax cuts that have favored the affluent. In order to promote a decent social safety net, Jansson believes that the federal government should set taxation levels at 20 percent or more of Gross Domestic Product, a figure surpassed only during World War II.

Who is to blame for this bungling? Jansson has occasional kind words for a few political figures, including Senators Robert La Follette, Jr., Robert Taft, and Paul Douglas, and (to an extent) President Eisenhower, who tried to curb military spending. But he criticizes all presidents for failing to take strong stands against wasteful spending, and Congresses for their subservience to lobbyists, especially to those of the military-industrial complex.

The Ronald Reagan years, he writes, were the most disastrous, in part because the enormous deficits amassed between 1982 and 1989 (including an estimated $3.4 trillion in waste, constant 1992 dollars) closed off needed liberal policy options for many years thereafter. But Jansson does not spare other presidential administrations, estimating that Roosevelt could have collected an additional $1 trillion in taxes (1992 dollars) during the Depression without imposing undue hardship on the employed; that Truman and Congresses tolerated large-scale waste in the military budget and failed to fight for an additional $1.17 trillion in taxes between 1946 and 1952; that if Eisenhower and Kennedy had raised taxes and pruned waste, they would have had at least $1 trillion more to spend on domestic purposes; and that fiscal and tax errors during the Lyndon Johnson years exceeded $1.55 trillion. His estimates for the Richard Nixon-Gerald Ford-Jimmy Carter years and for the Clinton years, respectively, amount to $1 trillion and $1.2 trillion.

Jansson knows that he is engaging in Might-Have-Been history. In passing, he identifies the many sources of fiscal mistakes over time, notably the powerful impact of the Cold War and of anti-tax sentiments in the United States. Forces such as these have seriously constrained historical actors. It is unlikely, therefore, that his prescription for cure-advocacy groups must pressure Congress to spend for constructive purposes-will be heeded. Nonetheless, Jansson is a sure-handed (though at times overly detailed) guide into the complicated budget-making process. Historians will learn a lot from reading individual chapters on presidential administrations, especially from Johnson's to the present.