Economics, Free Enterprise

Only a moral argument can roll back big government

Image credit: Ragesoss (Flickr) (CC BY-SA 2.0)

Image credit: Ragesoss (Flickr) (CC BY-SA 2.0)

The American Enterprise Institute was founded in 1938 by a group of business leaders who were concerned that government at all levels was consuming or transferring about 15% of the country’s gross domestic product. Today, government at all levels is consuming more than twice that, about 35% of GDP–more than a third of what Americans produce.

So what hope is there today for advocates of constitutionally-limited government?

AEI’s Michael Barone offers some thoughts on the matter in a new ebook, “Can Big Government Be Rolled Back?,” available for no cost from the AEI Press. Contra historians who have argued that government growth is subject to a ratchet effect, or is subject to cycles of growth and decline, Barone examines a number of cases throughout the twentieth century in which conservatives were able to slow the speed of government’s growth and, in some cases, roll back the tide.

Of particular interest is Michael’s first conclusion:

“One lesson is that those who wish to reverse public policies must be prepared to act, and to act rapidly. They need not just general ideas but also specific policies that legislative action or executive authority can put in place. The 1920s Republicans were well prepared with budget reorganization and tax cut policies, for example. The Republican Congress elected in 1946 similarly had a clear and specific agenda for 1947. The Reagan policy team was very well prepared, thanks to David Stockman’s deep and detailed knowledge of the budget, and acted with great swiftness. The Gingrich Republicans in 1994 had their Contract with America agenda, but also moved ahead with detailed budget and welfare reform legislation.”

Michael is certainly correct that it’s important to have a good grasp on the specifics of policy. I would add that it’s also important to be able to make the case for these policies not just on material grounds, but on moral grounds as well. How do limited government policies help strengthen the social safety net, create opportunity for the next generation, and reinforce our culture of individual initiative?

15 thoughts on “Only a moral argument can roll back big government

  1. remember: ” Michael Barone’s prediction: Romney 315, Obama 223″

    when you talk about “big govt” – you need SPECIFICS and you need to honestly acknowledge the fact that right now we do spend about 1.5 trillion on National Defense and 1.5 trillion happens to be the entire amount of tax revenue that we have.

    When I hear folks like Barone truly and honestly address the fact that 1/2 of our “big govt” is our military and national defense that costs real money every bit as much as other spending does – then I’ll put more stock in their screeds.

    • You’re not going to hear Mr. Barone address the fact that half of government is defense because it’s not true. Defense accounts for about 20% of the federal budget.

      • re: defense accounts for 20%

        how about a link to the budget guy to back up your assertion?

        you are apparently including FICA/SS which you should not since they are off budget and self-contained.

        If you strip out FICA/SS what do you get?

        you get about 50% of the spending but more than that you get about 100% of our tax revenues.

  2. A majority of the population wants things that are paid for by others. Only government has the coercive power to make that happen. Hence government will continue to grow until it no longer can. What would stop it? Possibly the intrusion of reality when such policies suppress growth enough or when creditors cut them off (as is playing out in Europe today). But, then, possibly not, since a government as large as the United States can simply renege on its obligations — either outright or by debasing the currency. That leads to even bigger government needing more power to control its citizens.

  3. If Obama wants to hike tax rates back up to Clinton levels in order to recapture the economic successes of those years, then let’s make sure they also roll back government spending to Clinton levels.

    If Obama wants fairness and “balance,” then what could be more fair and balanced than matching those higher Clinton tax rates with the then lower Clinton spending levels.

  4. There IS no “moral argument” and the AEI is just yanking the chain.

    From American Conservative, who are trying to rescue the GOP from itself:

    Daniel Larison says:

    December 10, 2012 at 3:19 pm
    For at least thirty years conservatives have justified lowering tax rates in terms of depriving the government of power, but the government has continually grown in size and intrusiveness anyway. Keeping taxes at their Bush-era rates or letting them go up to the Clinton-era rates isn’t going to affect the power or size of the government. It will simply determine whether we pay for more of it now or put that burden on the next generations. By reducing the price of expanded government, this low-tax position has made it easier to expand government, and of course both parties have taken advantage of this to do just that.

    The belief that there is a deeply meaningful principled difference between having marginal income tax rates at one level rather than another is silly. Anyone interested in reducing the enormous debt that the government has piled up understands that taxes are going to have to go up sooner or later in the absence of major reductions in spending, and the party obsessed with keeping taxes low has never shown much interest in making those spending reductions. But let’s ignore all of this and pretend that this has something to do with how mean TAC is to the poor Republicans.

    This was in response to an article that opened with:
    “As a general rule, no one should take advice from Marc Thiessen, and that applies doubly to his advice to Republicans on budget negotiations:”

  5. What is the moral argument? Romney failed to provide any specifics as to the fact that Obama’s policies had failed (i.e., not that they didn’t just fail to fix Bush’s failures, but that they actually failed themselves), why Obama’s policies failed, what Romney’s specific policies would be, or why Romney’s policies would succeed. But what he did do is make spending and debt a moral issue. And it went over like a lead balloon.

  6. Wow. From 15% to 35%. It seems AEI has failed and continues to fail miserably. I wonder what seminal innovation they have in the hopper to pivot. Apparently what they are doing isn’t working well at all. How can anyone hallucinate that more of it year after year will produce different results?

    I argue here they need veteran computer scientists on staff to work with their economists.


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