There are few beliefs more deeply embedded in the popular consciousness than that government wastes a lot of money. Seymour Martin Lipset and William Schneider, in their book The Confidence Gap, report that in surveys asking people how much of each tax dollar they think the federal government wastes, the median response is 48¢. Lipset and Schneider argue that the paradox of simultaneous public support for tax cuts, and f6r maintaining or increasing spending in all major categories of government programs, is explained by the perception that waste in government is so rampant that there can be big spending reductions without service rollbacks. Last January the President’s Private Sector Survey on Cost Control (generally known as the “Grace Commission” after its head, J. Peter Grace, Chief Executive Officer of W.R. Grace & Co.), delivered its final reports. The Grace Commission recruited over 2,000 corporate executives to scrutinize the government. Announcing the report, Peter Grace told the press that President Reagan had asked him to look at government agencies as if considering a merger or takeover. “The President’s private sector survey would not acquire the government” was the conclusion, he stated. No wonder. He found that, over a three-year period, a total of $424 billion in sayings could be obtained from controlling waste, “without weakening America’s needed defense build-up and without in any way harming necessary social welfare programs.” These were stupendous numbers, almost enough to eliminate federal deficits.