{"id":1182697,"date":"2020-05-05T09:20:46","date_gmt":"2020-05-05T14:20:46","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=109316"},"modified":"2020-05-05T09:20:46","modified_gmt":"2020-05-05T14:20:46","slug":"the-great-myth-of-small-government","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1182697","title":{"rendered":"The Great Myth of \u201cSmall Government\u201d"},"content":{"rendered":"

This post The Great Myth of \u201cSmall Government\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

\u201cAt this point,\u201d says a New York Times<\/i> editorial column, \u201ceven many Republicans acknowledge that the era of small government is over.\u201d<\/p>\n

We have no doubt they do. But how can an era end\u2026 if it never began?<\/p>\n

No Republican in current practice has lived one day in an era of small government.<\/p>\n

To visit one he must first climb into a time contraption…<\/p>\n

He must then dial the knobs past the Great Recession, past the Patriot Act and the war on terrorism, past the ballooning deficits of the 1980s, past the guns and butter of the 1960s, past the New Deal, past WWI… to perhaps 1900.<\/p>\n

A True Era of Small Government<\/b><\/h2>\n

In 1900 total government spending came in under 3% of the gross domestic product.<\/p>\n

Government\u2019s reach was so short… it scarcely brushed the individual citizen.<\/p>\n

This state of near-nirvana existed for the following 17 years. Then Mr. Wilson ordered the doughboys across the ocean\u2026 and into the trenches.<\/p>\n

In 1917 government spending \u2014 again, as a percentage of GDP \u2014 vaulted near 20%.<\/p>\n

But the boys were home before long. The cannons were spiked, the fleets mothballed, the swords beaten into plowshares.<\/p>\n

America could return to its central business \u2014 business. The pendulum never swung completely back to pre-war levels. But in fairness, it did swing back. By 1929 the percentage of government spending to GDP was back under 4%.<\/p>\n

Even in the spending-delirious Depression that followed, it never exceeded 11%.<\/p>\n

No Turning Back<\/b><\/h2>\n

By the end of the Second World War that figure scaled 45% \u2014 the arsenal of democracy was not cheap.<\/p>\n

The hot war ended, mercifully. But a Cold War began. And the New Deal was now riveted onto American life. There was no prying it away.<\/p>\n

Small government was well and truly dead.<\/p>\n

The Great Society swung by later to shovel additional soil upon its grave.<\/p>\n

No recent era of small government therefore exists. As well talk of the recent era of Model Ts, of telegraphs \u2014 or of honest money.<\/p>\n

Government spending as a percentage of GDP has averaged roughly 20% since 1980. That is, it has averaged WWI levels.<\/p>\n

The figure has run higher at times. It has run lower at times. But 20% is about par.<\/p>\n

Now mix in state and local government spending. You will find that total government spending presently nears 40% of GDP.<\/p>\n

But even these figures may soon appear quaint\u2026<\/p>\n

A $4.2 Trillion Deficit This Year<\/b><\/h2>\n

GDP is currently contracting at a savage clip \u2014 as government spending is expanding at an equally savage clip.<\/p>\n

The natural consequence is a vastly higher percentage of spending to GDP.<\/p>\n

The Congressional Budget Office projects this year\u2019s federal deficit will come in at $3.7 trillion\u2026 vastly eclipsing its pre-pandemic $1 trillion projection.<\/p>\n

But Manhattan Institute senior fellow Brian Riedl estimates the true figure at $4.2 trillion:<\/p>\n

\n

My models estimate that the 2020 federal budget deficit \u2014 just the deficit \u2014 will top $4.2 trillion…<\/i><\/p>\n

CBO projects that the first four coronavirus response bills will add $2.2 trillion to this year\u2019s deficit. The remaining portion of the deficit consists of the economic and technical effects of the economic shutdown \u2014 the nonlegislative costs such as fewer workers paying taxes and more people signing up for unemployment and Medicaid benefits. This analysis assumes approximately $1 trillion in these costs (bringing the total deficit to approximately $4.2 trillion)…<\/i><\/p>\n<\/blockquote>\n

A $4.2 trillion deficit would represent nearly 20% of the United States economy \u2014 a genuine enormity:<\/p>\n

The $4.2 trillion budget deficit would represent 19% of the economy \u2014 the largest share in American history, outside the peak of World War II, and double the 2009 level during the Great Recession.<\/i><\/p>\n

The way ahead promises little salvation, argues Mr. Riedl:<\/p>\n

\n

Even if the economy recovers quickly after reopening, the projected budget deficit will still approach $2.2 trillion next year and never again fall below $1.3 trillion. Combined with the mounting costs of Social Security and Medicare, the deficit will rise to $2.6 trillion by 2030 and continue growing thereafter.<\/i><\/p>\n

Over the full decade, the coronavirus recession is projected to add nearly $8 trillion to the national debt, pushing the debt held by the public to $41 trillion within a decade, or 128% of the economy. This would exceed the national debt at the height of World War II. Although that war ended before the debt could rise further, the expanding Social Security and Medicare shortfalls will keep the current debt increasing.<\/i><\/p>\n<\/blockquote>\n

The Purpose of Republicans<\/b><\/h2>\n

The old Republicans existed for one purpose: to trim both taxes and spending.<\/p>\n

They guarded the Treasury reasonably well. And you could trust them with the nation\u2019s purse.<\/p>\n

But these Republicans are no more.<\/p>\n

They stranded their posts years ago, opened the purse\u2026 and got elected.<\/p>\n

They no longer worked to limit spending but to channel it their way, to butter their own constituencies.<\/p>\n

They sat at the feet of Mr. Arthur Laffer, with his famous curve. Thus they discovered they could spend like Democrats \u2014 while taxing like Republicans.<\/p>\n

They labeled the dour old fiscal religion \u201croot-canal economics.\u201d<\/p>\n

Deficits do not matter was the new catechism.<\/p>\n

Only a handful of old-style Republicans hold out today. But their own party regards them as nuisances.<\/p>\n

They are akin to policemen raiding a brothel \u2014 and resented for much the same reason.<\/p>\n

Yet our sympathies are somewhat with the brothel, with the sinners\u2026<\/p>\n

\u201cSmall Government\u201d Is Boring<\/b><\/h2>\n

The term \u201csmall government\u201d is as hollow as a jug. How does one even define it in the 21st century?<\/p>\n

Perhaps small government can be likened to Supreme Court Justice Potter Stewart’s definition of pornography \u2014 you know it when you see it.<\/p>\n

We do not see it. Do you?<\/p>\n

Besides, it is a dreadful marketing slogan. You would not want to sell \u201csmall government\u201d for a living.<\/p>\n

It is duller than the dullest dishwater… and less inspiring than an Alan Greenspan lecture.<\/p>\n

Moreover, \u201csmall government\u201d is a defensive doctrine. It hunkers in. But no static defense can forever hold against the relentless assaults of \u201cprogress.\u201d<\/p>\n

Who Marches to \u201cSmall Government?\u201d<\/b><\/h2>\n

There were two great orators of antiquity. The Roman Cicero was one, the Greek Demosthenes the other.<\/p>\n

“What a great speech,” said the people when Cicero talked. But what did the people say when Demosthenes spoke?<\/p>\n

“Let us march.”<\/p>\n

Very few march for small government. They may applaud it, politely. They may nod their heads dutifully.<\/p>\n

But few will march.<\/p>\n

Many will \u2014 however \u2014 march for “Health Care for All!” or “Save the Planet!” or \u201cEquality Now!\u201d<\/p>\n

These are cries that awaken the blood. They pluck up the adrenaline. They rally us to the colors\u2026 and inspire us to enlist.<\/p>\n

They inspire us to march.<\/p>\n

We may march ultimately off a cliff if present trends do not reverse. We are not confident they will.<\/p>\n

We are hopeful \u2014 but not confident. Yet of this we are confident:<\/p>\n

\u201cSmall government\u201d is nowhere in America\u2019s future\u2026<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/i><\/p>\n

The post The Great Myth of \u201cSmall Government\u201d<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post The Great Myth of “Small Government”<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

“Small government” hasn’t existed in America for the better part of a century…<\/p>\n

The post The Great Myth of “Small Government”<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[3724,366,656,4253,3095,4254,463],"tags":[],"class_list":["post-1182697","post","type-post","status-publish","format-standard","hentry","category-daily-reckoning","category-dailyreckoning","category-economy","category-myth","category-republicans","category-small-government","category-the-daily-reckoning"],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1182697","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1182697"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1182697\/revisions"}],"predecessor-version":[{"id":1182698,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1182697\/revisions\/1182698"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1182697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1182697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1182697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}