WOWSmallerGovtCosts3-10-01pg1

WOW. Smaller Government sure costs a lot!

Recently, while talking up his tax cuts at a Sioux Falls, S.D. rally, President Bush proclaimed, �I trust you rather than the government to spend your money.� This is part of the republican mantra of smaller government that we have heard year in and year out. Ronald Reagan and George H. W. Bush both had democratic congressional control in at least one house. Bill Clinton controlled the presidency from 1994-2000, while the republicans controlled congress. Each time, the democratic power in at least one area of congress or the presidency gave republicans an excuse for not making government smaller.

It was not unusual to hear the deficits of the 80�s blamed on the democratic congress, while they also gave credit to Reagan for outspending the Soviet Union in an arms race. While this makes little sense, it has been the credit blame game of the 80�s. In the 90�s, it was the big spender, Bill Clinton that was an obstacle to balancing the budget and the cause of big spending, while republicans put some restraint on Clinton and balanced the budget all by themselves.

The question becomes what is their excuse for the next two years? Consider that President Bush trusts people to spend money more than government, yet proposed a $1.96 trillion budget. That proposal is about $100 billion more than last year, or by my �fuzzy math�, about 5.37% more. President Bush does keep his spending down to about a 4% increase in discretionary spending, in fairness.

One has to wonder about this �cut� to a 4% growth rate in the �discretionary� budget. When did Americans start to allow a �cut� in growth of the budget to be called a �cut� in spending? What happened to Bush ideas of eliminating the Department of Education? How did �smaller government� or �more efficient government� constitute a $100 billion increase in spending? Last time I checked, when a company got smaller, it cut expenses. It didn�t cut the growth of expenses, but it actually cut its total expenses.

Just as some considered Clinton as the best friend of republicans for adopting conservative ideas as his own to pass, maybe Bush will do the same of democrats. Or maybe, this �smaller government� of republicans is a myth? Ever look at Reagan�s proposed budgets? Not one was a proposed decrease in government spending. Of course, the democrats are to blame for what Reagan proposed. Who will President Bush blame? Republicans control the congress and the presidency. Did those big spending Senators make him propose those increases? While Reagan came close a few times, even he, trying to outspend the Soviet Union, never proposed a $100 billion increase in government spending.

It seems that we cannot only not afford bigger government, we may not be able to afford smaller government at this pace. Even at the current pace, the budget will exceed $4 trillion in 10 years. In order to maintain the budget as a percent of the GDP in that time, our economy must grow more than double in 10 years. That is an awfully high expectation of any economy.

To put this growth in perspective, our current GDP is about $8 trillion, give or take a hundred billion or so. Alan Greenspan and economists talking about the �goldilocks� economy we have had, not too hot and not too cold, like the growth rate to be between 2 and 4%. If the economy grew at 3% for 10 years, the GDP would be about $10.75 trillion. If the economy grew at 6%, faster than desired, risking inflationary pressures, after 10 years�.$14.33 trillion. Still short of doubling the economy. At 7%, $15.74 trillion, approaching doubling the economy in 10 years, but still not there. The danger of this kind of growth expectation risks longer term economic damage, possibly greater than the recessions following the �junk bond� crash and the �tech stocks� bottoming out.

Maybe it is time to move beyond the hollow rhetoric of the republicans and actually face reality. We cannot afford to continue to spend at the rate we currently do. Maybe we need to start to look for true solutions, rather than increasing this spending at a rate we cannot afford. Maybe it is time to hold the republicans responsible for smaller government, since they have no more excuses. And if they don�t give us smaller government, maybe it is time to find someone who will deliver it, not just talk about it. They can talk the talk, but will they walk the walk? As of now, their form of �smaller government� costs too much.
--Chris Knight 3/10/01

Chris Knight is a Sr. Fellow at the Global Freedom Institute

Return to Main Page