America’s first and arguably still greatest welfare pressure group was not the poor or the unemployed. Rather, it was military veterans, who figured out when the nation was still a fledgling how to extract wealth from the state. After all, what plea works on more people than, “We fought and bled for you, so now you owe us”?

In Paid Patriotism, George Mason University economics professor James Bennett takes a long, highly critical look at the history of veterans’ benefits: cash payments, medical care, hiring preferences, and more. It’s an overwhelmingly sordid tale, but one that the author tells with enthusiasm (and often laced with sarcasm).

Bennett doesn’t dispute that soldiers who have been wounded in U.S. wars (of which he obviously thinks we have too many) deserve to be treated and, as far as possible, made whole by the government. But he insists that we should draw a distinction between those unfortunates and the great majority in our military, who have never even heard a shot fired in anger, much less sustained a battlefield injury. Today, any kind of military service qualifies one for a smorgasbord of lifetime benefits whose costs spill red ink the way Gettysburg spilled blood.

Pensions on the United States / One of the first acts of our new Congress was a 1792 law declaring that “any person called out into the service of the United States who was wounded or disabled while in actual service … shall be taken care of and provided for at the public expense.” That was perfectly reasonable, but as Bennett notes, “that phrase while in actual service will be a barrier that once breached is damnably hard to restore.” In that respect, the dike began to crack in 1805 when Congress amended the pension act so that benefits were extended to veterans who, later in life, became unable to earn a living, even though they had been hale and healthy at the time of their discharge.

Then in 1818 a great fissure opened when, Bennett writes, “a mixture of gratitude, patriotism and shrewd lobbying” led to enactment of the Revolutionary War Pensions Act. The romantic image of the suffering old soldier caused Congress to legislate that men claiming to have served in the war and attesting before a federal judge to their inability to provide for themselves qualified for a pension. The bill was pushed by President James Monroe, and his congressional allies said the costs would be minimal. Besides, the Treasury held a surplus and what better way to spend it than to assist the nation’s heroes?

That piece of generosity did not turn out as expected. There was a flood of applications, many of them transparently fraudulent. Even after weeding out some of the latter, the cost of veterans’ pensions went from 1.5% of the federal budget in 1818 to 16% by 1820.

Rather than learning a lesson from that experience, in 1832 Congress again extended benefits—full pay for life for Revolutionary War vets—leading to a new cascade of claims, many of them dubious. A daring opponent of this bill, Rep. Thomas Bouldin (Va.), stated that the expansion of military pensions led “a large portion of the people of the United States to look to the Treasury as the unfailing spring from which they were to receive every good. The poor, instead of being relieved in their own neighborhoods, were pensions on the United States.” His words would prove to be extremely prescient.

Not only did the government’s pension generosity drain the Treasury, but it also opened up sectional antagonism between the North and South. A large majority of the pensioners lived in the northern states, but the federal government’s revenues came chiefly from tariffs, which were borne disproportionately by the South. Thus, the government’s generosity toward the soldiers (and claimed soldiers) of the Revolution helped to fuel the country’s next great war.

Benefit of politicians (and others) / Whereas the government waited decades after the Revolutionary War to start paying military pensions (as well as for veterans of the War of 1812 and the Mexican War), the Civil War prompted almost immediate action: an 1862 law granting benefits to disabled Union soldiers (or their widows if killed). The cost of those payments rose steadily as the war progressed, but Pension Commissioner James Baker stated that they would peak in 1872, then begin to decline. What Baker failed to consider was that politics would keep ratcheting up the number of soldiers eligible and the generosity of the payments.

The crucial year was 1879, when the Arrears of Pensions Act was passed, in effect back-dating pensions for thousands of Union army veterans. Its cost was estimated by its Republican proponents at around $20 million. Opponents, however, saw it as a far more expensive vote-buying scheme. The Cincinnati Commercial, for example, wrote, “This great pension fraud amounts to a scheme to confiscate and parcel out the money in the Treasury for the benefit of local politicians.” That view proved correct, as claims (including a great many for widows, minors, and dependent relatives) poured into the Pension Office at an unprecedented rate.

Bennett quotes a contemporary observer, a minister, who noted the effect of the gusher of federal money on veterans: “Their organizations for mutual aid and fellowship were turned into political machines not for the promotion of public ends, but for the one purpose of political plunder for the personal profit of the members.”

From that time until the present day, veterans groups lobbying for benefits would take center stage. In the 1880s, the heavyweight was the Grand Army of the Republic (GAR), which allied itself with the Republicans and would work ceaselessly to increase payments to veterans and their family members. In 1870, only 5% of Union veterans were receiving a pension, but thanks mainly to the GAR, that figure was 93% by 1910. Crucially, the need for a war injury to be eligible to collect was eliminated. “In its pursuit of loot,” Bennett writes, “the GAR played the patriotism card often and without shame.”

One result of the GAR/​Republican alliance was pressure to keep tariffs high. Tariffs were still the main source of federal revenue and the GAR wanted vast amounts of money to flow into the Treasury to pay the ranks of Union pensioners. The nation’s protectionism was therefore not just a matter of bad economic theory; it was also driven by the GAR’s success in pushing the idea that America was eternally and infinitely indebted to the “boys in blue.” Spending finally peaked at over 41% of federal outlays in 1893.

Beyond pensions / World War I yielded its share of military preferences and pension follies. One innovation was in giving veterans a huge boost on civil service exams. Vets had to be hired even if their scores were substantially below those of non-vets. As a result, by 1923 34% of all new civil service employees were veterans. Also, the government made the fateful decision to establish Veterans Administration hospitals across the nation. Their construction was rife with corruption and the problems with long waits and bad care remain to this day.

At the end of the war, Congress, feeling the inevitable pressure to help the millions of soldiers and sailors being mustered out, enacted a “bonus” for them. It wouldn’t be payable, however, until 1944. When the Depression hit, demands for immediate payment of the bonus became insistent. In the summer of 1932, thousands of “Bonus Army” marchers descended on Washington, DC to press their case. Just as the soldiers were starting to drift away in political defeat, the government overreacted, first with local police and then, after bloodshed, federal troops under Gen. Douglas MacArthur. Newsreel footage of troops rousting impoverished vets out of their pitiable encampments caused an uproar. Knowing that President Herbert Hoover would take the blame, his opponent in that year’s campaign, Franklin D. Roosevelt, gleefully exclaimed to an aide, “This elects me.”

World War II, of course, brought a fresh round of demands for benefits for the men and women in uniform. Beginning in 1943, the two big veterans’ organizations, the Veterans of Foreign Wars and the American Legion, vied to push a new bill through Congress. The VFW wanted the traditional sort of postwar cash payment, but the Legion won this contest of political entrepreneurs by proposing a set of new, immediate benefits in what came to be called the G.I. Bill of Rights, a name that Bennett calls “a stroke of public relations genius.” Who would dare oppose it? (Oddly enough, FDR was not enthusiastic, preferring to treat vets not as a special class but merely as recipients of the state’s general welfare system.)

Under the bill, the government would help veterans by giving them up to 52 weeks of unemployment benefits, making them eligible for home, farm, and business loans through the Veterans Administration, and providing subsidies for vocational training or college.

The educational aspect of the bill has been hyped enormously, Bennett writes, with “nostalgia-crusted encomia.” Supposedly, the G.I. Bill deserves credit for boosting the U.S. post-war economy because it opened up opportunities for talented people who would otherwise have remained undereducated. Bennett’s attack on this sacred cow, alone, is worth the price of the book. Of the minority of vets who made use of the educational subsidies, the majority did so for vocational training, which had been around before the war, but not with free government money. Many vets, he writes “received training allowances to teach them to do things they’d been doing ably since they were ten years old.” Moreover, there was a huge amount of fraud in these training programs.

As for those vets who used their benefits for four-year colleges and universities, most would have attended anyway, continuing a trend toward increasing higher education attendance that had been in progress since the 1920s. The great effect of the G.I. Bill, Bennett argues, was not that it made the American workforce more skilled and capable, but that it enriched colleges as never before. Administrators quickly realized that they could raise tuition, and did so. All that the G.I. Bill actually accomplished was to start the unwholesome trend of Americans needing to acquire a college degree for work that had previously been done mainly through on-the-job training. The economy didn’t get a boost—just the higher education sector.

Since the initial G.I. Bill, we have had many amendments that always ratchet up the level of “generosity” toward the men and women who enter the military. Now the prospect of heavily subsidized college, a lifetime of low-cost medical care, hiring preferences, and other benefits are the major recruiting tool for the armed forces. The costs are prodigious and rising, but there is no reason to believe they will decline because, Bennett notes, “no one ever lost a congressional race by being too solicitous of veterans’ demands.”

And that’s why the book doesn’t close with an upbeat solution to this gigantic problem. There isn’t one.