David Hoppe

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:: The big government perplex

Small may be beautiful, butů

by David Hoppe

I remember a time when I used to entertain the notion that maybe Indiana would be better off if somehow it could manage to separate itself from the rest of the so-called United States. That’s right: secede.

Look, I thought to myself, we have a great lake to our north, with access to the Atlantic Ocean. A mighty river courses along our southern border. Not only can we raise an abundant variety of food; if we had to, we could revive the Region’s industrial engine, thereby diversifying our economy in a way that other states would envy.

Well, no sooner did I draw the outlines of an Indiana Republic, than I began finding some rather serious flaws. How, first of all, could we afford to pay for all the services and amenities provided by federal funds? Even if our retooled agricultural and industrial sectors took off, would we ever be able to foot all the bills by ourselves?

What would we do about replacing entitlements like Social Security and Medicare? Would we have to form our own militia?

Finally, I took a long look at the collective brain power in our state legislature. Yikes. I had to admit that troublesome as our federal government might be, making it better really is the best chance for most of us to improve our lot in life — whatever state we happen to be living in.

That’s why the recent avalanche of bad news about our federal government is so discouraging. Whoever said that Washington, D.C. is a city full of smart people doing stupid things nailed it. The trifecta of reports and hearings concerning abuses of power at the IRS regarding the treatment of conservative nonprofit applications; the Justice Department seizure of Associated Press telephone logs; and the continuing failure of the Veterans Administration to deal with claims in a timely fashion has certainly shaken my confidence in our massive bureaucracy’s ability to act on the peoples’ behalf. If what’s been going on isn’t enough to make you paranoid, I suggest you try polishing your rose-colored glasses.

Since American politics has devolved into a dog-eat-dog pissing match, it comes as no surprise that many pundits have been eager to pile these scandals on President Barack Obama’s doorstep. He is the Commander-in-Chief, after all, so he must be to blame. Not only that. Obama’s message, that government can serve to make our lives better, seems like a scam.

There’s a kind of comfort in this. If everything is Obama’s fault, then all we have to do is throw him out and hire someone who will tell us that what we need is smaller government.

But the scale of American life appears to make a smaller federal government impossible to achieve. The Reagan presidency is a case-in-point. It’s hard to imagine an American politician more dedicated to shrinking government than Ronald Reagan. But Reagan, for all his small government rhetoric, actually grew the federal bureaucracy. According to Sheldon L.  Richman of the Ludwig von Mises Institute, the budget for the Department of Education, which candidate Reagan promised to abolish along with the Department of Energy, more than doubled under his watch to $22.7 billion. Social Security spending rose from $179 billion in 1981 to $269 billion in 1986. Farm programs went from $21.4 billion in 1981 to $51.4 billion in 1987, a 140% increase. Medicare spending went from $43.5 billion in 1981 to $80 billion in 1987. Federal entitlements, which amounted to $197 billion in 1981, reached $477 billion in 1987.

As much as he tried to downsize the federal government, Reagan couldn’t do it.

He was not alone. When his British counterpart, Margaret Thatcher, passed away recently, she too was praised as an icon of small government conservatism. But Republican economist Bruce Bartlett has written that taxes as a share of gross domestic product in Britain actually increased sharply during Thatcher’s first seven years in office. Taxes, wrote Bartlett in the New York Times, “were significantly higher than they were when she took office.” He quoted George Gilder’s criticism of Thatcher’s policies, written in 1982: “The net effect of the Thatcher program has been a substantial increase in taxation on virtually all taxpayers.”

Although Thatcher privatized many industries and sold off a large portion of her country’s public housing, she maintained her country’s welfare system, especially its popular National Health Service. Bartlett concludes by saying conservatives should learn from Thatcher “that it is very hard to shrink the size of government even when a strong leader has complete control of the legislature…and that at the end of the day it won’t shrink very much.”

This suggests that those of us whose legitimate frustrations with government make us want, as Grover Norquist said, “to drown it in the bathtub,” may be chasing our tails. Just as the idea of an Indiana independent of all the other states is, finally, delusional, shrinking the government of a nation as enormous as ours is a practical impossibility — especially if every citizen is going to share a baseline quality of life.

Instead of shrinking the beast, we need to tame it. Real reform is the answer.