Why do US politicians spend so much on campaigns when the salary is not high enough to justify the expenditure?

Question

Hillary Clinton spent so much on her 2008 presidential campaign that she had a campaign debt of over $30 million. The annual salary of a US president is only $400,000. Even if Hillary were successful, the US presidential income over one full 4-year term is only $1.6 million. It is totally insufficient to cover her campaign expenses. Any business would go bankrupt if it spent in this manner. I am 100% sure Hillary Clinton is much smarter than me. There must be reasons that are unknown to outsiders like me.

Why do US politicians spend so much on campaigns when the salary is not high enough to justify the expenditure?

Answer 1

The primary reason: to win

But also note they they typically aren't spending all their own money. Many do spend a good chunk of their own money, but most of it is campaign money, which comes from donations.

As for their salaries, true, they are low compared to what they otherwise need to invest in a win, but typically there's much more to be gained financially than just the salary. There's book deals, speaking engagements, and--post their run in office--consulting, think tanking, lobbying, etc.

And, I suppose, some truly are in it to be public servants. Some.

Answer 2

Why do US politicians so much on campaigns when the salary is not high enough to justify the expenditure?

Assuming that the $30 million was money that Hillary Clinton loaned the campaign, she could recoup that money with more fundraising. That's trivial to do if she wins. It's the next thing to legal bribery. Contributor pays campaign which turns around and pays the politician. Of course the contribution has no impact on the politician's actions or policies. Wink, wink.

Even after a loss, the loans can be recouped by fundraising. It's just more difficult. This is one reason why a politician who has just lost a race may start speculation about another race. It's easier to find contributors for the next race that one might win rather than the last race that one already lost.

If the money was loaned to the campaign by others, well, that's their problem isn't it? Hillary Clinton's not responsible for her campaign's debts.

Beyond all that, the number one reason is ego. Hillary Clinton could have made more money giving speeches to Wall Street for those two years than campaigning. Barack Obama could have made more money putting his name on a couple more ghostwritten books than being President. Donald Trump would have been better off losing than winning—no one would be talking about conflicts of interest then. They do it for the same reason that the apocryphal actress was glad to win the award; they want to know that we really, really like them.

Answer 3

The same facts as the other answers, but with different illustrations and a rewording that may be of use. The OP wrote:

Hillary Clinton spent so much on her 2008 presidential campaign that she got into debts of over USD30m.

Let's correct the wording:

The campaign promoting Hillary Clinton spent so much on its 2008 presidential campaign that it finished with debts of over USD30m.

Think of it like the backers who invest in, and the bankers who finance, expensive Hollywood movies. Some movies fail and lose money, but other movies turn large profits. The fact that the movie business continues to exist proves that the total profits on movies consistently outweighs their losses.

A campaign's investors profit somewhat more indirectly. Suppose a widget magnate indirectly somehow donates $1M to a campaign. The widget magnate might want a lower widget tax, (or none at all), or perhaps a higher tax for his rivals, or a large order of widgets from the government, (perhaps at a huge markup), or a widget monopoly in some conquered province, or free or cheap land to build widget factories, or not to be fined or punished if a factory poisons its surroundings, etc. For the widget maker a grateful lawmaker can be like the genie in Aladdin's Lamp. Any one of those things might be worth ten or a hundred times $1M to the widget magnate.

It was the custom when men received nominations to come to me for contributions, and I made them and considered them good paying investments for the company. In a Republican district I was a strong Republican; in a Democratic district I was Democratic, and in doubtful districts I was doubtful. In politics I was an Erie Railroad man all the time.
-- "Jay Gould : A Character Sketch" by William T. Stead, in The Review of Reviews (February 1893)

The widget magnate has rival magnates, and they want the same things he does. To protect themselves from each other's lawmakers they compete to fund grateful lawmakers of their own; politicians are like magical soldiers for these warring magnates, not unlike a child's trading card game.

The fact that extravagant political campaigns continue to exist proves that the total profits for campaigns consistently outweighs their losses.

Answer 4

Elected officials spend way more than their salary to get elected because the salary is a minor part of the job. The average worth of our elected officials is in the millions already. The reason they spend so much is due to the power and respect being elected commands, along with feeding their massive egos. Also, the money they are spending generally was campaign donations so it wasn't their money anyway, and campaign donations are much more regulated and hard to convert to personal wealth than the myriad of options they have once elected. There are also a lot more ways to increase ones wealth in congress than just the salary as well, congress members have the ability to spend federal money on what they see fit so they can help their friends out and get kickbacks, though they have to be careful and do this indirectly because it is technically illegal. Furthermore congress can also make huge amounts of money in the stock market, because they get access to tons of insider information and can't be charged with insider trading. As mentioned by D.A. they also gain access to post elected positions like lobbyists where there salary can increase by more than 1000%.

Answer 5

If we accept the premise that people are in the political game to enrich themselves, then there are several reasons.

1. With very few exceptions, almost none of the money spent in campaigns is actually the candidates'.

2. The salary drawn for members of Congress is a pittance compared to what they make by other means while in office. One of the more famous ways is that they can use knowledge gained from hearings, and also knowledge of upcoming regulations and rules that are not available to the general public to engage in speculative investing (purchases of stocks and equities). This is an illegal practice known as "insider trading," except, for members of Congress, it is not illegal because the laws against it expressly exclude Congress.

   I'll use the example of disgraced former Speaker of the House Dennis Hastert to illustrate this. As Speaker of the House, he had purchased a large amount of real estate in and around his district which was located west of Chicago. He then inserted language into highway appropriations legislation requiring that Interstate Highway expansions and improvements in that are be required to follow a certain route - right through the lands he purchased, which required that the lands be purchased from him at a much higher value/cost.

   Washington Post article about Hastert's land deals

   Think about the more recent and famous scandal, where he was convicted of paying hush money to former students he sexually victimized when he was a high school teacher. Hastert was a high school teacher from 1965 to 1981. He was a state assembly representative from 1981 to 1986. He was a Congressman from 1986 until 2007. Add up his salaries from all of those jobs and ask yourself, how did he have millions of dollars to pay just for hush money?

   Clearly, the salary drawn is not a substantial portion of the earning potential of federal legislators.

3. The revolving door of legalized graft and corruption. The deep pocket donors who buy legislators under the current system of campaign financing can spend millions to get their chosen legislators into office. These are businessmen, and they tend to get billions back in the form of favorable legislation passed and crony government contracts. Another investment they make is that when a legislator is a "friend," both in the general voting, but, especially, as a member of committees, they get rewarded afterwards with 7- and 8-figure "consulting" contracts after they leave office for jobs as lobbyists for companies they were supposed to oversee, lobbying their former colleagues. This was a technique originally perfected in the 80s and 90s by the royal House of Saud family, and quickly adopted by other interests, for obvious reasons.

4. For the very highest level positions, or for the most flamboyant or charismatic politicians, the fame and recognition from being in political office will allow them to enrich themselves, once out of office, through different types of media - talk shows, jobs with news networks, books (with massive advances), and paid speaking engagements.

Article about the ROI on political spending

USA Today article about the revolving door

Answer 6

1. They usually are spending OPM (other people's money).

2. Very often there are graft opportunities for enrichment. Former Mayor of Newark Sharpe James had never held a private job in his life but was convicted for using city credit card to pay for a trip to buy a yacht.

3. There are many legal ways for self enrichment: Jobs (both public and private for friends and relatives); leadership PACs where they money can go directly to the pockets of the politicians; book advances; and speaking fees.

4. Many businesses provide special deals for politicians.

5. Members of Congress are exempt from insider trading rules. So they have investment opportunities at their fingertips.

Answer 7

Because not everything is about money. Become the president is about Power, Prestige, Pride, and Victory

First of all, as noted in the other answers, politicians often spend other people's money, and they have ways to recoup the expenses.

But ultimately, if a politician has the means, they'd be happy to spend a significant amount of money for the power and prestige they'd gain as the president of US.

It is the closest thing to ruling over 300 million people as you'll get to. You get to make decisions that affect you whole country. You get to implement your vision of how things ought to be over one of the most powerful countries in the world. Your name will be remembered for generations to come,well, at least by high school students who are forced to memorize it for their midterm exam.

Answer 8

I don't think politicians are necessarily in it "just for the money". And as others have said, campaign spending isn't "out of pocket spending".

But, if they were primarily motivated by $$$, they make plenty of it after their term:

Hillary Clinton and her husband, former President Bill Clinton, combined to earn more than $153 million in paid speeches from 2001 until Hillary Clinton launched her presidential campaign last spring, a CNN analysis shows.

In total, the two gave 729 speeches from February 2001 until May, receiving an average payday of $210,795 for each address. The two also reported at least $7.7 million for at least 39 speeches to big banks, including Goldman Sachs and UBS, with Hillary Clinton, the Democratic 2016 front-runner, collecting at least $1.8 million for at least eight speeches to big banks.

This is nothing all that particular to the US or to the Clintons. See Boris Johnson:

An update to the MPs' register of interests showed Mr Johnson had received more than £750,000 in fees for three speeches given in November.

Granted, not everyone will command those fees. Truss the Brief's speeches might be less lucrative, not least because she's so-so at making them, but still..

Lesser politicians may make do with lucrative consultancies or lobbying.

Answer 9

Don't underestimate the worth of connections.

Most people who enter politics don't have a simple 9-17 job, most of them are investors and businessmen, or are at least self-employed. Even after their terms are over, the connections they made with other important people will provide them with opportunities they otherwise wouldn't have had.

Answer 10

It comes from whats called 'SUPER PACS'

lets say Walmart is willing to set up your ENTIRE rally, provide the news, provide the snacks, provide everything, literally everything. All you have to do is show up and do your speech.

In return, all they ask is this: 'hey you mind doing me a favor when you win.... by building more of my walmarts in areas and tearing down other stuff? thx'