Three Big Lies about “Big Government”
Many conservatives who stylize themselves as defenders of small government lean precariously on Reagan-era platitudes when pressed to justify their affections. Though Reagan’s alluringly demagogic 1981 decree that “government is not the solution to our problems [but rather], government is the problem” is easy to chew, its arbitrary application has led to a number of misconceptions about the role, size, and scope of “government.”
Time and again conservatives characterize those of us on the left as “large government loyalists,” as “tax and spend liberals” who “support the growth of an inefficient and parasitic public sector.” Unfortunately, the tales that conservatives use to vituperate those of on the left are as shallow as they are tall.
Let’s take a few minutes to debunk three common conservative critiques lodged against supposed “big government” sympathizers.
Myth #1: President Obama has created a “spending inferno.”
Did not Harvard Business School teach you anything, Mitt? In FY 2009—the last of George W. Bush’s presidency — federal spending rose by 18 percent from $2.98 trillion to $3.52 trillion. Then, in FY 2010—the first budget overseen by President Obama—federal government outlays fell by nearly 2 percent. In FY 2011 spending rose 4.3 percent to $3.60 trillion and in FY 2012 spending is scheduled to rise 0.7 percent to $3.63 trillion, according to the Congressional Budget Office’s (CBO) most recent budgetary estimates. Finally in FY 2013 — the final budget of President Obama’s term — spending is scheduled to fall 1.3 percent to $3.58 trillion. In total, federal spending under President Obama will have risen from $3.52 trillion to $3.58 trillion representing an annualized increase of just 0.4 percent. Federal spending is currently increasing at its slowest rate since Dwight D. Eisenhower’s presidency nearly sixty years ago.
Myth #2: “Government” has become “too big” and “too inefficient” under President Obama.
The most common measure of government size is federal, state, and local expenditures relative to gross domestic product (GDP). According to this index total government expenditures as a percentage of GDP has varied modestly, + 7 percent, from President Bush’s last year and office to FY 2012 under President Obama.
Some of this increase, of course, is attributable to expanded federal payments for individuals by way of Social Security and Medicare. However, according to the Office of Management and Budget “defense and international spending” under President Obama has also increased by nearly 10 percent since President Bush left office, an argumentatively inconvenient truth for conservatives.
Concurrent to relatively stable spending-to-GDP ratios, it’s paradoxically possible to argue that the federal government is actually contracting. Here’s why. According to data recently released by the St. Louis FED around 16.5 percent of labor-eligible adults now work for the government, a figure down from its peak of 20 percent in 1975 under republican President Gerald Ford. Further, as a percentage of total employed Americans, federal government workers have been dropping steadily and are now near an all time low. According to the same data-set, state and local governments have employed roughly the same number of employees as a percentage of total U.S. employees for the past forty years or so.
Myth #3: Firing public sector workers like teachers, firefighters, and police officers represents the best strategy for reducing debt incurred by “big government” spending.
The compensation of public school teachers, firefighters, and police officers is largely subsidized by the collection of state and local taxes. Although total U.S. debt stands at a towering $57 trillion, red ink at the state and local level accounts for less than 5 percent of total indebtedness. (State and local governments don’t wage endless wars.) National (federal) debt comprises 28 percent of total debt and the remaining 67 percent includes aggregated mortgage, student loan, and credit card debts.