Can the government ever be too big? How much spending is enough spending? And if there can be too much spending, where is that point? William Voegeli, Senior Editor of the Claremont Review of Books, explores these complex questions and offers some clear answers.
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Ever since Franklin Roosevelt promised Americans a “New Deal” in 1932, liberal politicians and pundits have insisted that the government must do more to alleviate poverty, increase economic security, and enhance the quality of life. But the word “more” implies there’s a level of government activity that would be “enough.” In reality, however, there’s never enough.
That’s because the liberal theory and practice of activist government is an endless pursuit of a goal that can’t be achieved. When was the last time you heard a liberal politician say, “Yeah, we solved that social ill. We’re just going to close up that government agency now, zero out the budget and move on to another problem.”
What you hear instead is that “we need more.” And, more always sets the stage for still more down the road.
Liberalism’s lack of a limiting principle raises two questions: First, can our republic govern itself on this basis? Second, should it? My answers are…maybe. And No.
Maybe we can go on, at least for a while, to continue to expand entitlement spending. We’ve been doing it for decades. Adjusted for inflation and population growth, government spending—federal, state, and local—was nearly seven times as large in 2014 as it was in 1948. That sounds like a perfect example of the economist’s adage: if something can’t go on forever, it won’t.
In 1948, government spending amounted to 17%—just over one-sixth—of our gross domestic product, the total value of all the goods and services produced by the American economy that year. In 2014, government spending was 32% of GDP, just under one-third. This trend puts us on a steady course to a European social democracy—one where government spends more than 50% of GDP.
Europe is straining under this burden. France, for example, the third largest economy in the European Union, has stagnant growth and unemployment twice as high as America’s.
Even nations with stronger economies, such as Sweden and Germany, face the dilemma of welfare states around the world: the number of workers paying taxes continues to decline, while the number of beneficiaries—those who receive government benefits—continues to grow.
America has the same problem. As it is, government spending on social welfare and insurance programs, the part of the budget liberals like best, is crowding out everything else. Such spending accounted for 72% of federal outlays in 2014, twice the proportion in 1969. Common sense suggests this can’t go on indefinitely.
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