This year, the federal government will spend $3.46 trillion, roughly 21 percent of our GDP. Think about that: More than a fifth of all the goods and services produced in this country over the course of a year are subsumed by the federal government. Is it any wonder that a government shutdown reverberates throughout the economy?
During the 2011 debate over raising the debt ceiling, President Obama noted that the U.S. federal government sends out 70 million checks every month. As frightening as that number is, it is almost certainly an underestimate. According to the Washington Post, the president’s estimate included Social Security, veterans’ benefits, and spending on non-defense contractors and vendors. But he did not include reimbursements to Medicare providers and vendors, or electronic transfers to the 21 million households receiving food stamps. (Nor did he include most spending by the Defense Department, which has a payroll of 6.4 million active and retired employees and, on average, pays nearly 1 million invoices and 660,000 travel-expense claims per month.). The actual number might be closer to 200 million.
According to calculations by Harvard economics professor Greg Mankiw based on data from the Office of Management and Budget, roughly 60 percent of Americans receive more in government benefits than they pay in federal taxes. A Tax Foundation study suggests that, after President Obama’s health-care law is implemented, as many as 70 percent of Americans are net recipients of government largesse. Nearly a third of Americans receive more than half their income from the government.
There are also more than 80,000 pages of federal regulations, overseen by some 456 federal agencies, and more than 4.3 million federal employees. We have become a nation of Julias, the Obama campaign’s fictional woman whose every life decision was subsidized, regulated, or directed by government. One can certainly see how a government shutdown would strike terror in her life.
To all this, the president would add Obamacare — 2,500 pages of legislation and more than 12,000 pages of regulations, giving government control over another one-sixth of the U.S. economy.
And it’s only going to get worse. According to the Congressional Budget Office, by 2050 the federal government “will continue to grow faster throughout the rest of the century, eventually reaching levels that are completely untenable/incompatible with economic growth and prosperity.”
Given the growing tide of red ink facing this country over the long term, and our profound philosophical differences about the role of government, this budget crisis will hardly be the last. Unless we want to spend more time worrying about whether those budget battles will hurt the country, we should redouble our efforts to get government out of our lives. If we return government to its proper size and functions — become more a government of Jefferson and less a government of Julia — future shutdowns will be far less likely and, if they do happen, even less painful.
— Michael Tanner is a senior fellow at the Cato Institute and the author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.