A client called me last spring to ask how a proposed change to the capital gains rate would hit his portfolio. Fair question. That's my job. Then he added something that stuck with me longer than the tax math did. He said he'd vote against anyone who touched his Social Security check, regardless of what else was on the ballot. He's 74. He built two companies from a garage and a line of credit. He's one of the most productive people I've ever advised. And in that one sentence, he became something else too: a man voting his subsidy instead of his principles.
The Constitution's framers weren't naive about this. Madison spent Federalist No. 10 explaining why a pure democracy, where a majority sets policy directly, has no defense against what he called factions, groups whose interests run contrary to the rights of others or the good of the community. His answer wasn't to trust future majorities to behave. It was to build a republic large enough that no faction, including a majority faction organized around who gets paid by whom, could capture the whole government at once. The 16th Amendment gave Congress the power to tax income. Nothing obligates Congress to spend that revenue buying the votes of the people it taxes. That's a policy choice, not a constitutional one, and policy choices can be undone.
You've probably seen the quote pasted over a stock photo of the Capitol dome: a democracy cannot exist as a permanent form of government because once voters discover they can vote themselves money from the treasury, they'll keep doing it until the system collapses under its own debt. It's attributed to a Scottish judge named Alexander Fraser Tytler, who died in 1813. Here's the problem: nobody has ever found Tytler saying it. Historians trace the wording to a newspaper column from the early 1950s, more than a century after Tytler was in the ground. I'd rather build an argument on evidence than on a quote invented and pinned to a dead man's name.
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Ayn Rand made a version of the same argument in fiction, and fiction doesn't need a citation. Atlas Shrugged's premise, that a society rewarding need over production eventually runs out of producers willing to be looted, is a novel, not a data set. What readers recognize isn't a fixed tipping point where 51 percent of the electorate votes itself the other 49 percent's paycheck. It's a shift in what politicians find it rational to promise, one budget cycle at a time.
There's a piece of this that Rand and the Treasury numbers both skip. The entitlement mentality starts as a classroom problem. The last time the federal government tested eighth graders on civics, in 2022, the average score fell for the first time in the exam's 25-year history, and fewer than a quarter scored proficient. Meanwhile, the share of young men neither working nor in school has climbed for three decades, and roughly two-thirds of them aren't even looking for work. A school system that spends more time on grievance than on how government works isn't building the patience self-government requires.
The mechanism has a name economists use: concentrated benefits, diffused costs. About 40 percent of American households will owe no federal income tax this year, according to the Tax Policy Center, mostly because of a standard deduction and credit structure Congress built on purpose, not fraud. Most of those households are retirees on fixed incomes or working families the tax code was designed to exempt. But it means that for four in ten voters, a fight over federal spending is a fight over somebody else's money in every practical sense that shows up on a ballot. The top 10 percent of earners pay roughly 70 percent of federal income taxes. Our national debt crossed $39 trillion this year. Annual interest on that debt now exceeds $1 trillion, more than the entire defense budget. None of that happened because one election flipped a switch. It happened because every spending program made sense to the coalition that benefited from it, and no member of Congress paid a personal price for the sum of all of them.
This isn't about corrupt politicians buying votes. It's incentive structures working as designed. A member of Congress who votes to expand a benefit gets credit from an organized constituency today. The cost gets spread across millions of taxpayers and pushed onto voters who haven't been born yet. Nobody in that transaction is behaving irrationally; each is responding correctly to the incentives the system hands them. The problem isn't greed dressed up in a campaign slogan. It's a structure that rewards short time horizons and punishes anyone who says no.
The Constitution built in more resistance to this than people give it credit for. The Senate's staggered six-year terms were meant to insulate at least one chamber from the immediate pressure of an aroused majority. The veto, the override requirement, and the amendment process under Article V exist because the Founders assumed majorities would sometimes want something unwise. None of that guarantees restraint; Congress has found workarounds by moving spending into programs that never come up for a fresh vote once written into law. But the friction is still there for anyone willing to use it.
My client isn't wrong to protect what he paid into for 50 years, and I'm not writing this to scold him. I'm writing it because the Founders built a system that assumed self-interest would exist and tried to channel it, not pretend it away. That system still works when enough voters, productive and dependent alike, understand that a treasury that pays everyone eventually belongs to no one. The tipping point isn't a headline waiting to happen on some future election night. It's a slow erosion of the idea that government spending has a cost somebody has to pay. The Constitution never promised us a majority that would always vote wisely. It promised us a structure built to survive the times it doesn't.
Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He has a BS from Northeastern University and has completed postgraduate studies at UCLA, UPenn, and Harvard. He writes about finance, constitutional law, national security, human nature, and public policy.
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