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Posted at 10:15 AM ET, 01/ 4/2011

The size of government matters

By Jennifer Rubin

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.

By Jennifer Rubin  | January 4, 2011; 10:15 AM ET
Categories:  economy  
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Comments

Yeah, it stinks how much Bush piled on the debt after the Clinton era surplus of $128 billion in fiscal year 2001. Then Bush went and racked up deficits of $158 billion in 2002, $378 billion in 2003, $413 billion in 2004, $318 billion in 2005, $248 billion in 2006, $162 billion in 2007, and $410 billion in 2008.

The only time the GOP wants fiscal responsibility is when someone else is in charge of the purse. Extending unemployment is evil but a large increase in the national debt is OK so long as it comes in the form of tax cuts for a tiny number of their rich friends. And again, unlimited spending on defense is all ok so that they can claim the moral high ground on national security, as if all the spending were somehow immune from the same corruption, lack of oversight and waste of other federal projects/policies.

And yes, now under Obama the govt has gotten bigger. Lets google and see if Rubin was screaming and yelling during the Bush years about W spending like a drunken sailor or about "growing" government?

I also wonder what Rubin thinks of cutting defense spending. There certainly is a lot of "waste, fraud and abuse" (the GOP catch-phrase) in defense contracts, rebuilding Afghanistan and of course, Iraq. Interesting though that the neocons never want to cut defense spending, no matter what. Trillions for unnecessary (Iraq)and unwinnable (Afghanistan) wars and yet people like Rubin are banging the drums for a possible war with Iran.

How about we look at foreign aid to Israel to cut some costs? Their economy grew almost 4% but the US is still in a recession- why do we keep giving Israel more economic aid per year than we do all African countries combined? Oh yeah, politics.

Yes, govt has expanded under Obama but it is totally disingenuous for people like Rubin to start screaming now after remaining silent for so long. Just like their new-found love of Executive power oversight, it's all hypocrisy, partisan politics and general hackery.

It's also disingenuous to claim that the economic crisis is primarily the result of large government- how convenient to ignore the HUGE role of the private sector in all of this.

Posted by: Stacyx | January 4, 2011 10:45 AM | Report abuse

How about we look at foreign aid to Israel to cut some costs? Their economy grew almost 4% but the US is still in a recession- why do we keep giving Israel more economic aid per year than we do all African countries combined? Oh yeah, politics.
Posted by: Stacyx

And in the meantime China has taken advantage of our lack of attention to Africa to build relationships that is making China much richer. We deserve our decline due to our national mental disease,Exceptionalistic Dementia.
I think you will appreciate this article describing the effect on Israel of America's Decline.
http://www.huffingtonpost.com/leon-t-hadar/israel-needs-to-adjust-to_b_803789.html

Posted by: rcaruth | January 4, 2011 11:17 AM | Report abuse

Stacyx, I know you have Crosby, Stills, and Nash CDs in your collection. And that you play them and sigh and smile and pine for the days when it was cool to read Doonebury and drink extra-lousy coffee. Since you have no clue as to what Obama has done to spending levels and the deficit (makes Bush look like a green horn) and don't care where the 800+ billion stimulus dollars went (and how does that number compare to "aid to Israel" on your Barney Frank Club Secret Decoder Abacus?), then why not go back to your bong, and your antidepressants, and your terrible music, and let the grownups deal with the irresponsible mess created by the World's Smallest Man (for whom you and 50 million other morons, including Moron #1, David Brooks, the Pants Crease Queen, voted).

Posted by: johnnyramone | January 4, 2011 11:41 AM | Report abuse

stacyx instead of attacking republicans, that do deserve the attack why not just support your expansion of gpvt. ideas with the results . here is a report card on govt. programs dept. of education F hud F usda C dept. of energy F dept. of defense B FBI A DEA D Social security administration F Medicare management F dept. of treasury F Border security F Management of foreign trade F there is more but i am sure you get my point. you might dispute my grading curve but with a track record like this why would you want to give any more of your taxes to this organization.

Posted by: eddiehaskall | January 4, 2011 11:46 AM | Report abuse

Ah, the good old days of Bush, when we measured the deficit in hundreds of billions instead of trillions...

But seriously, yes, let's cut defense spending AND foreign aid to Israel, Egypt and the rest of the Middle East. No sacred cows, everybody must share the pain.

Posted by: grabowcp | January 4, 2011 12:15 PM | Report abuse

johnnyramone- nice ad homimen attack minus any constructive substance. Sadly, I don't have any CS&N in my collection, nor am I on antidepressants and I don't smoke pot. So, three strikes and you're out. Of course, when you don't have an argument to make in response to someone with whom you disagree (me), it's easier to just simply toss out snarky insults, so good job on that. So, if there is an adult in this room that might be capable of discussing ways to help clean up the economic mess, it certainly isn't you.

To eddiehaskall- I'm not defending the govt btw. Of course when anyone points out conservative hypocrisy the knee-jerk response is to toss insults like the guy I responded to above or to assume that I think the Obama admin. has done a WONDERFUL job with the govt. Actually, I don't think he's done a wonderful job and I don't believe the govt is functioning as well as it should. That said, it's a bit too much to listen to some people do nothing but criticize all the while knowing they were content to watch Rome burn for 8 years for no other reason than it was a member of their team in charge. Also, the answer isn't always deregulation and tax cuts and yet that's about all we hear about.

Posted by: Stacyx | January 4, 2011 12:23 PM | Report abuse

tax cuts and yet that's about all we hear about.
Posted by: Stacyx

What we don't hear about from the lunatic right is Ron/Rand Paul,Tea-Partiers with a capital TP. I wonder why?
http://reason.com/blog/2011/01/03/ronald-reagan-ron-paul-the-fed

Posted by: rcaruth | January 4, 2011 12:31 PM | Report abuse

Mr. Brooks evidently believes the ends justifies the means.

Posted by: metanis | January 4, 2011 1:10 PM | Report abuse

"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."

This discussion omits a key factor of Greece's financial catastrophe. That is Greece's topheavy public, patronage-driven employment numbers - which have crushed entrepreneurial spirit to the extent that most maturing adults consider a government job the only security allowing the starting of a family.

Thus has government parasitism drained private enterprise, the generator of all the tax funding supporting the parasites, in Greece. No wonder that book-cooking and political corruption are the primary skills needed to keep Greek businesses, small and large, afloat and feeding their workers.

And by noting that our own public employee unions are all unanimously Democrat fiefdoms, positively Grecian in their coercive campaigns to expand their parasitic share of our own national economy, it's unbelieveable that David Brooks is so blind as to yawn with unconcern at the size of government.

Posted by: InsufficientlySensitive | January 4, 2011 1:26 PM | Report abuse

Stacy I don't totally disagree with you; I wasnt' much of a fan of Bush's big government Republicanism either.

But the tax issue you mention always annoys me. The top 10% pay about 70% of federal income taxes. Now if you go along with the argument that giving people back their own money to stimulate the economy (which I think is probably more effective than government stimulus, just IMHO), just WHO ARE YOU SUPPOSED TO GIVE THE MONEY BACK TO, other than those who paid it/would pay it? the highest income earners pay most of the taxes. Of COURSE they are going to get more of their own money!

I could give you a long list of stuff I bought in 2008 when my business was doing really well. Buying that stuff was very stimulative to the economy.

Posted by: jmpickett | January 4, 2011 1:44 PM | Report abuse

Paul Krugman smacks around Paul Ryan like a bratty little stepchild. Paul Ryan wants to give to the rich, and take from the poor, period. He does have great hair, though, and has been dubbed a genius by the FOX cymbal monkeys.

Posted by: danw1 | January 4, 2011 2:03 PM | Report abuse

I could give you a long list of stuff I bought in 2008 when my business was doing really well. Buying that stuff was very stimulative to the economy.
Posted by: jmpickett

You need to ask yourself two questions:
In 2008,70% of our GDP was based on household spending,is that sustaneable in your opinion?,80% of that 70% was purchased with Debt,are you with me?
Not long ago,70% of our GDP was Industrial/Manufacturing based,and at the time,most corporate purchasing was cash/asset based,not Debt.
In 2008,40% of the entire GDP was the FIRE sector. Not long ago the FIRE sector accounted for 5% of our GDP.
The question is what was the basic change in our economy that caused the other changes that I have described? And,how do we deal with those changes?

Posted by: rcaruth | January 4, 2011 2:40 PM | Report abuse

The size of the economy matters! We must ask ourselves why this author and her ilk spend all their time talking about government? Don't they know that it takes an economy to employ us? Don't they know it takes a healthy and growing market for the products and services that businesses can offer?
Magicians thrive on keeping the audience occupied and their attention distracted from what the magician is about to surprise them with. After such an economic failure as this recession, why is it so important for us to listen only to allegations about government? Why not focus on what has happened to markets that helped feed business growth? There are plenty of people I know who were very surprised by the financial collapse and the massive shedding of jobs. And now we're supposed to focus on what Wall Street interests want us to?
The number of people in America who have jobs that afford them to put a roof over their head, feed themselves, educate themselves, transport themselves, etc., meet their needs for products and services is the market for businesses large and small.
So, we all understand that in a market economy, business and investment goes where the best and growing markets are. That's where the money is being made and we understand that businesses want to stake out a place in markets of the future.
If we pay attention, especially to the announcements of corporate profits in recent years and especially the last year we find out that many are making more money overseas. Some announcements I heard reported that up to 40% of the profits earned by these companies are earned overseas. It doesn't surprise me that up to 40% of the employees some of these corporations are now overseas.
Why is the apparent outcome of 30 years of supply side economic policies that markets are growing overseas and not here? It's not politicians who have been choosing overseas markets, it's American businesses with their investment dollars who are voting for overseas markets.
Why do self professed market economy advocates not take credit where it is due. This isn't a condemnation, its an objective conclusion that the profit motive imparts change on our society. Our corporations are investing overseas because its profitable.
They can make things cheaper and make more profit to support stock market prices that are higher and higher. Higher profits also compete with money made trading derivatives and other financial instruments. Capitalism is the competition for capital. Activities that make the highest returns cause other activities to make higher returns too. If it takes fewer jobs, lower wages, less regulation, and government focused on business needs, that's the rules. People just have to learn to live with it. That's Supply side economics.

Posted by: tigman_2 | January 4, 2011 7:00 PM | Report abuse

@tigman2

The cost of maintaining the US government (local state fed) has become more than the economy can bear. In addition to the expense of all the entitlements we have developed since the 60s,every governmental rule, regulation and law carries a compliance cost that US businesses and consumers ultimately pay in the form of taxes and fees, many of which are hidden. (Most states exempt consumers from paying sales tax on utilities. However, the utility companies pay corporate taxes and sales tax on much of what they purchase, which is then blended into the rates and paid by the consumers.)

When the LA state capitol was built the elevators required an operator. When the elevators were upgraded some 40 years ago to the more modern push-button types, they kept the elevator guy employed. He sat on a little stool and asked "What floor, please?" and then he'd push the button for you. And why not? After all, the money the legislature was spending was somebody elses...

Posted by: johnyuma | January 4, 2011 7:47 PM | Report abuse

tigman_2, fewer jobs and lower wages are not inevitable in supply-side economics.

One big reason too many of us endure those negative attributes is because too many of us (not all, but many) are waiting around for someone "smarter than us" or "better connected than us" to solve our problems FOR us, instead of doing what it takes to keep control of our individual destinies when it comes to career and economic health.

When Americans choose to act to further their economic destiny, they CAN prevail, individually and as a nation ... but we don't get that when so-called respected people keep telling us that we need to let the Best and Brightest in DC take over and "help" you, more and more, with the implication that we're too stupid as ordinary citizens to take care of a lot of our problems, ourselves.

And we forget what it was like to be a consumer in the days before regulation diminished by means de jure and/or de facto (like triple-digit phone bills instead of unlimited long distance for under $50 a month) and our economy opened up to global competition (like living with whatever junk the green-eyeshade crowd of the Big Three and their union "buddies" put into the showrooms in the 1970's and early 1980's).

Posted by: ritchie_the_riveter | January 4, 2011 7:56 PM | Report abuse

One reason Bush was unpopular was that conservatives didn't much like his big spending domestic programs, nor steel tariffs, but always thought the Dems would be worse.
They are.

Envious success-haters always want to punish the hard-working, to reward the lazy, because it seems fair to punish the lucky, and reward the unlucky. But no gov't program can reliably separate hard-working from lucky, nor unlucky from lazy.

Any American who doesn't want the rich to get richer, and policies that reflect this, shouldn't be surprised if the rich don't offer more jobs to Americans.
The rich only offer workers jobs if it makes the rich richer -- that's exactly why the job is offered. It also makes the worker richer, positive sum, win-win. That's the magic of the peaceful, private sector.

The envious like the win-lose gov't sector using force, instead of peaceful agreement. But that seldom creates positive sums, and always creates losers. Win-win positive sum only is why tax cuts, letting wealth creators keep more wealth they've created, works better as stimulus than win-lose gov't programs.

Hi J-Ru, typo, public->>private:
"helping people to transform their lives is to limit the size of government and allow the public sector "
near the end.

Posted by: TomGrey2 | January 4, 2011 9:34 PM | Report abuse

We should all learn to think of our politicians as fiduciaries. We have given them the power to write check on our accounts and charge on our national credit card. If a private financial adviser or banker had run out of control like this, we'd be screaming for his head.

The best protection we have is to limit the size and power of the government at all levels. By allowing politicians to buy votes with taxpayer money, we have infantilized ourselves. We need to grow up and take responsibility.

Posted by: athorpe | January 6, 2011 5:46 PM | Report abuse

One has to look at the strings attached to the foreign aid that goes to Israel. The great bulk of it is required to be spent in the United States. That aid is not so much to Israel as it is back-door aid to Boeing, Lockheed Martin and the other military suppliers of the global war industry.

Posted by: mhw089 | January 8, 2011 11:02 PM | Report abuse

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