Commentary

Pricey Government Prize

By Stephen Moore
This article was published in the Washington Times, February 3, 2004.

President Bush has released his fourth budget to Congress, requesting $2.34 trillion of spending for fiscal 2005. I have often maintained one of the biggest problems with Washington is no one can tell the difference between $1 million and $1 billion.

When Congress starts counting our tax dollars in the trillions of dollars, it is like a trip to Michael Jackson’s Neverland Ranch. One trillion dollars, is a million million dollars. That’s a lot of money, no matter how you stack it.

The president will predictably boast this is a lean budget that spends money judiciously on top national priorities like homeland security and not a penny more. He will try to assure conservatives this budget limits the growth of federal nondefense, nonsecurity spending (social programs) to less than 2 percent. His Democratic rivals will complain this is a penny-pinching budget that underfunds education, health care, the environment, etc., etc.

They are both wrong. A federal budget that will spend more money in a single year than the entire GDP of France and 3 times what it cost to fight World War II can hardly be disparaged as inadequate or celebrated as tightfisted. Uncle Sam Inc. will spend more money in just this year than it spent combined from 1787-1900 — even after adjusting for inflation.

Ironically enough, we are now celebrating the 10-year anniversary of Newt Gingrich’s bold declaration that “we Republicans will make government smaller and smarter.” It didn’t exactly turn out that way, given that the budget is now nearly $1 trillion larger than when the Republican revolution was launched.

The truth is that in recent decades, neither political party has been a particularly good steward of taxpayer resources. Government ingests about 4 times to 5 times more of America’s national output today than in 1900. The government’s share of everything we produce and earn has about doubled since the end of World War II. Or here’s another way to think about it: If you took all the spending by government and just evenly divided it among all families of four in America, each family would be more than $50,000 richer. This is double the level of spending in 1960 and 14 times the amount government spent in 1900, even after adjusting for inflation.

So the question American taxpayers should ask is: Does my family really get anywhere near $50,000 worth of services every year from city hall, state governments and Uncle Sam Inc.?

The composition of government spending has changed too. Even with the recent increases in the military budget in the new age of terrorism, a smaller share of federal spending is devoted to national defense — ironically, the one area of the budget where Congress has a clear constitutional authority to spend money — than at just about any other time in U.S. history. Traditionally, about one-third to one-quarter of all federal expenditures were for national security. Now that percentage is down to less than one-fifth.

Almost all the growth of government in this past 50 years has been a result of increased civilian social program spending.

In 1940, 4 million Americans worked for government and 11 million worked in manufacturing. Today, there are 7 million more Americans working for government (21.5 million) than in all manufacturing industries (14.5 million). We have shifted from an economy of people who make things, to an economy of people who tax, regulate, subsidize and outlaw things.

We certainly have more rulemakers and red-tape dispensers than ever before. In 1935, there were 4,000 pages of federal regulations in the Federal Register. Now there are 68,000 pages. That’s a 17-fold increase in 65 years.

Since 1970, the number of federal regulators nearly doubled from 69,000 to 130,000. We work almost half our lives now complying with government rules, edicts, levies, paperwork requirements, taxes and fees.

The odds seem a lot higher at least in the short term government will continue to rapidly expand than that the federal spending orgy will subside. (After all, the ink isn’t even dry on the Medicare drug bill and the cost is already up by $100 billion.)

President Bush has allowed the budget to grow by 8 percent per year after inflation in his first three budgets. What’s worse, many in Washington want government to grow a lot more in a hurry. Most of the Democrats running for president, and even some Republicans in Congress, yearn for the day when government entirely takes over the health-care industry — so we can have a socialized system more like France and Canada. (This would add about 5 percent to 10 percent more of the economy under direct government control.)

Many in Congress want government to fully take over the financing and control of education of preschool children (ages 3-5) and to provide free universal college to all 18- to 22-year-olds. This too, could add another 5 percent to 10 percent of the government’s total take.

In this bloated budget, the president seeks funds to keep marriages intact, to prevent overeating, to encourage teenagers not to have sex, and to help give Americans the willpower to stop smoking.

Should it bother us that both parties now have bought into the belief government now has a federal program, bureau, agency or grant contract to deal with every conceivable need: an indoor rain forest in Iowa an arts festivals in Alaska, and swimming pools in New York — and, what’s next, relief from the acne on my teenager’s right cheek?

Should the request for a $20 million increase in the National Endowment for the Arts budget, the people who funded a picture of a crucifix in a toilet infuriate us? Well, yes, actually, it should.

For one thing, it makes us poorer. Just a few months ago the Heritage Foundation and the Wall Street Journal issued an economic freedom index of the world in which the U.S. ranked only 10th freest. The study discovered a strong and not surprising statistical relationship between economic freedom (of which one component is limited government) and economic growth and prosperity.

A greater threat to our out-of-control budget is that it erodes personal freedom. When government grows, as Thomas Jefferson once famously put it, “liberty yields.” Dollar by trillions of dollars, we are voluntarily giving up our liberties for a government that promises us in return a blanket of protection from cradle to coffin. Republicans are steering us in the direction of the “workers’ paradise” of a European socialist welfare state, and the reply from the Democrats is faster, faster.

Stephen Moore is a senior fellow at the Cato Institute.