The size of government matters
As he did in his debate last month with Rep. Paul Ryan (R-Wisc.), David Brooks in his column today advances the proposition that the size of government is not as important as what government does. He writes:
The crucial issue is not whether the federal government takes up 19 percent or 23 percent of national income. The crucial question is: How does government influence how people live? . . .
The best way to measure government is not by volume, but by what you might call the Achievement Test. Does a given policy arouse energy, foster skills, spur social mobility and help people transform their lives? Over the years, America has benefited from policies that passed this test, like the Homestead Act and the G.I. Bill. Occasionally, the U.S. government has initiated programs that failed it. The welfare policies of the 1960s gave people money without asking for work and personal responsibility in return, and these had to be replaced. The welfare reforms of the 1990s involved big and intrusive government, but they did the job because they were in line with American values, linking effort to reward. . . .
How big will the resulting government be? That is a secondary issue. If a policy enhances achievement, we should be for that thing. If it displaces investment, we should be skeptical of it. Quality, not quantity, matters most
This certainly sounds appealing, but there are several problems with Brooks's formulation.
First, given our current trajectory, size matters very much. The issue is not "whether the federal government takes up 19 percent or 23 percent of national income," but whether we are moving toward a Greece-style debt crisis. As Ryan has explained, we are headed toward an unsustainable situation in which 40 percent (including payment on debt) of our income is devoted to federal spending. It is not simply a matter of shifting from spending here to spending there. In his Roadmap for America, Ryan writes, "Now America is approaching a 'tipping point' beyond which the Nation will be unable to change course -- and this will lead to disastrous fiscal consequences, and an erosion of economic prosperity and the American character itself. The current administration and Congress are propelling the Nation to the brink of this precipice."
Second, Republicans and fiscally responsible Democrats correctly see that the size of government, not merely the content of its policies, directly impacts "productivity and mobility." Once again, the numbers matter. From the 'roadmap':
Debt as a share of the economy is projected to exceed 60 percent this year (2010) - greater than the 2009 level, which was the highest in 50 years - and will reach 82 percent of GDP by the end of the next decade under the administration's policies. (In nominal dollars, debt held by the public will triple over the next 10 years.) The U.S. has not seen debt at these expected levels since the end of World War II. Even the countries of the European Union, hardly exemplars of fiscal rectitude, are required to keep their debt levels below 60 percent of GDP.
You simply can't have a growing, dynamic economy when such a huge portion of our resources are devoted to government spending and servicing of the debt.
Third, the size of government, the growth of entitlement programs and the debt we are passing on to the next generation directly impacts the character of the American people. Ryan again addresses the misconception that we can continue down the current path without negatively impacting the fiber of our society:
Reasonable minds differ about the extent to which government should be the main provider of these benefits. But the issue is becoming moot: the major entitlement programs have expanded beyond the government's ability to sustain them in the future. Trying to do so will bankrupt the country, and deprive the next generation of retirees the promised services for which they worked, and to which they contributed, all their lives.
More ruinous in the long run is the extent to which the "safety net" has come to enmesh more and more Americans - reaching into middle incomes and higher - so that growing numbers have come to rely on government, not themselves, for growing shares of their income and assets. By this means, government increasingly dictates how Americans live their lives; they are not only wards of the state, but also its subjects, increasingly directed in their behavior by the government's "compassion." But dependency drains individual character, which in turn weakens American society. The process suffocates individual initiative and transforms self-reliance into a vice and government dependency into a virtue. The Nation becomes a sort of vast Potemkin Village in which the most important elements - its people - are depleted by a government that increasingly "takes care" of them, and makes ever more of their decisions for them. They take more from society than they provide for themselves, which corrodes society itself, from the inside out. The environment also becomes ripe for exploitation and control by the few who remain "ambitious."
And finally, it is far from clear that government is all that competent to "arouse energy, foster skills, spur social mobility and help people transform their lives." Yes, taking away government handouts, in the course of welfare reform, certainly helped to recapture an ethic of work. But for all our billions spent on education, what have we gotten? Have the billions spent on "green jobs" created self-sustaining industries? Very smart people imagine that they can devise very smart programs to prod and pull their fellow citizens, treating the country as if it were one giant controlled experiment. The reality is quite different.
It is noteworthy that the policy preferences that Brooks attributes (correctly) to Republicans all have to do with shifting money and control away from the public to the private sector ("a flatter, simpler tax code with lower corporate rates, a smaller debt burden, predictable regulations, affordable entitlements"), not simply redirecting the trillions that we already spend. Republicans' formula for arousing energy, spurring social mobility and helping people to transform their lives is to limit the size of government and allow the public sector (with the benefits of sound money, predictable regulation, a reliable legal system and low taxes) to flourish; Democrats don't buy that.
The reason the parties fight about the size of government is because it matters so much. It would be nice to imagine we can avoid that fight, but ignoring the growth of government is precisely what has landed us in the current predicament.
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