Watching Out for the "Big Government" Bogeyman

Politicians get a lot of mileage out of the term "big government."  It works well for them because it is a pretty meaningless glittering generality.  For most of us it's lack of a precise meaning encourages us to conjure up emotional memories of bad experiences with government - standing in line, paying our taxes, frustrating phone calls with government officials.  It allows the politician to touch our emotions without committing to anything at all.  So here are some questions to ask yourself when some politician starts talking about "Big Government."

So what is "big Government"?  Do we have a "big government"?  

Economists measure the size of government by looking at how much of each countries total yearly wealth is spent by Government.   As of 2010 of the twenty biggest economies in the world 14 countries spend a bigger percentage of their national income than the US.  We are down there with Brazil, Russia, South Korea, Mexico, India and China, in the low spending category.  Way above us in the spending are countries like Norway, Sweden, Germany, Japan and most of the rest of Europe (in short all the places we like to visit because they are so nice and safe).  

If you measure "big" by how much we spend per person, of the 20 biggest economy's in the world, the US spends per person slightly more than Russia, South Korea, Mexico, Brazil, India and China, but much less than residents of Norway, Sweden, Germany, Japan and the rest of Europe.  

But even these rankings are a little misleading, because they don't address how the Government spends its money.    The US spends far more on defense than any other country.  41% of the worlds defense spending is spent by the US.  We spend two to three times more on defense than the countries that are immediately below us on the list (including China)  and many times more than most of the countries in the world.  You couldn't find three countries in this world who, if you lumped all their defense spending together, would match the US.  So in terms of spending on things that improve the lives of citizens we spend less than every other large economy.  

So, factually, if we eliminate defense spending, we already have a very small government in comparison with the rest of the world.  And if you still think Government in the US is to big, ask yourself, what other government in this world do you think is better?

Even if you assume we have a "big government" what should we cut to shrink it?

Do we want to cut aid programs to the poor?  Let them starve or be homeless?  Sorry, even if we cut those programs, they are a miniscule part of overall Federal spending.  If we cut those programs we end up with more non-productive people in our economy, and little economic benefit, so to some degree we are cutting our nations economic future for little current benefit.  

Do we want to cut Social Security?  Make everyone give their money to Wall Street to fund their retirement?  Or rely on their employer to fund their retirement?  This country is full of people who lost much of their retirement in the 2008-2009 economic meltdown, even as Wall Street walked away doing just fine.  Even before the 2008-09 meltdown we had already seen lots of employee's of big corporations lose most or all of their retirement when the companies collapsed or got rolled into a bankruptcy reorganization in which the company was allowed to dump their pension obligations to employees (I checked with a friend who is a bankruptcy expert - he has never heard of a bankruptcy reorganization where executives of the company lost any of their retirement - only the workers).  What about people who don't bother to save for retirement?  Do we want to stand by and watch as millions of old people die destitute?  Social Security is a program good government does, and does pretty well - at least it would if Congress wasn't always stealing money out of the Social Security trust fund to pay for tax cuts for rich folks.  

Do we want to cut government spending on highways, and bridges and other infrastructure?  The infrastructure our economy depends on our ability to operate efficiently.  It wouldn't save much and would undermine our economy in the future.  Do we want to cut the environmental programs that have cleaned up our air and water?  Have we forgotten the days when our major rivers were prone to catching on fire because of all the pollutants?  Do we need to remind ourselves of the amount of money we save by reducing health care costs caused by ignoring the environment we live in?

In short do we want to turn into the US into the kind of country much of the third world is trying to escape from?  Where the amoral, powerful and aggressive do well at the expense of everyone else? Government is a big part of what makes life in the US better than life in much of the rest of the world.  

Federal programs exist because most people support those programs, so Politicians kill their chances of being elected if they start talking about cutting specific programs.  So instead, some years ago, politicians who don't really care if our country treats all its citizens humanly learned they can they haul out the 'big government" bogeyman to make it sound like they will actually do something without specifying what they mean or actually doing much.

Again, ask yourself what other government in this world do you think is better?  

But what about the deficit?

Politicians often imply our deficit is a result of social programs to benefit the poor or middle class.  This implication is false.

Do a search online for a timeline charting the United States Public debt.  What you will see is we ran up a huge debt in WW II, then the debt fell steadily between 1950 and 1980, the time when most of those social programs were enacted.  Then in the early 1980's public debt began to expand.  It was not caused by social programs, but as a direct result of Mr. Reagan's policy of cutting taxes without making offsetting cuts in programs, and in fact he greatly increased government spending by juicing up military budgets.  The debt trended up rapidly through the Reagan and Bush Sr. administrations, then began to reverse during the Clinton years.  But in 2003 the second President Bush followed Mr. Reagan's example, cutting taxes while increasing defense spending (he was the only President in history who did not increase taxes during war time).  The debt shot upward again.  Then in 2008-2009, when the financial world collapsed, first the Bush administration and then the Obama administration sought huge bailouts that, while they probably prevented us from sliding into a Depression, shot the deficit up further.

So bottom line our current deficit would not have happened without the two rounds of tax cuts accompanied by increases in military spending, and the financial collapse that capped off the 12 years Republican's controlled Congress.

Even now, the one place where cuts would really make a big difference would be to cut defense.  As noted above we spend more on defense than most of the rest of the world combined.  $.50 of every dollar we spend on items budgeted to be supported by our income taxes goes to defense spending.  Yet the Republican architects of the deficit still refuse to consider cuts in defense spending.

If one was of a conspiratorial persuasion one could make the case the people who really would like to turn the US into a third world country where the rich have everything and the poor scramble to survive, have for 30 years cut taxes and increased defense spending.  It is apparent to anyone with half a brain that if you cut your income and increase your spending, you are going into debt.  Yet the very politicans who most talk about "big government" have been the ones who cut taxes and increased spending.  Now we have a big deficit, and they are arguing we have to cut all these other programs because we can't afford them, but we can't touch defense spending.  So instead of having to come out and argue with voters that we need to cut these social programs because they think they are bad programs (an argument they would lose), they can now come to voters and say "we just can't afford them - look at our deficit!"

After all, cutting social programs is a win/win situation for many wealthy folks.  They personally don't need them; they make a lot of money off of their investments in defense companies; they  pay relatively little in taxes, and it generally isn't their kids who get killed or maimed for life on distant battlefields.