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Uncle Sam, Inc.
We're the most expensive government in history.


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Stephen Moore

Today President Bush releases his fourth budget to Congress, requesting $2.34 trillion in spending for fiscal year 2005. That’s trillion.

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I have often maintained that one of the biggest problems with Washington is that no one can tell the difference between $1 million and $1 billion. But when Congress starts counting our tax dollars in the trillions of dollars it’s like taking a trip to Michael Jackson’s Neverland. 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 that 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 that this budget limits the growth of federal non-defense, non-security spending (social programs) to less than 2 percent. His Democratic rivals will complain that this is a penny-pinching budget that under-funds education, health care, the environment, and on down the line.

They are both wrong. A federal budget that will spend more money in a single year than the entire GDP of France and three times what it cost to fight World War II can hardly be disparaged as inadequate or celebrated as tight-fisted. Uncle Sam, Inc., will spend more money in just this year than it spent combined between 1787 and 1900 — even after adjusting for inflation. Ironically enough, we are now celebrating the ten-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 it was when the Republican revolution was launched.

But the truth is that, in recent decades, neither political party has been a particularly good steward of taxpayer resources. Government ingests about four-to-five-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.

Here’s another way to think about it: If you took all our government spend divided it evenly 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 fourteen times the amount government spent in 1900, even after adjusting for inflation. The question American taxpayers need to ask is this: Does my family really get anywhere near $50,000 worth of services every year from city hall, state government, 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-half of all federal expenditures were for national security. Now that percentage is down to less than one-fifth.

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

In 1940 there were 4 million Americans working for government and 11 million working 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 rule-makers 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 sixty-five 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, that government will continue to rapidly expand than 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 put about 5 to 10 percent more of the economy under direct government control.) Many in Congress also want government to fully take over the financing and control of the education of pre-school children (ages 3 to 5) and to provide free universal college to all 18-to-22 year olds. This, too, could add another 5 to 10 percent to the government’s total take.

In his bloated budget for 2005, 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 have bought into the belief that government now needs a federal program, bureau, agency, or grant contract to deal with every conceivable human need? An indoor rainforest in Iowa? Arts festivals in Alaska? Swimming pools in New York? What’s next, my teenager’s right cheek gets a relief from acne?

More government, for one thing, makes us poorer. Just a few months ago the Heritage Foundation and the Wall Street Journal issued an economic-freedom index in which the U.S. ranked only number 10 worldwide. 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.

Our out-of-control budget also erodes personal freedom. When government grows, as Thomas Jefferson once famously put it, “liberty yields.” Dollar by trillion dollar 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. The reply from the Democrats is faster, faster.

– Stephen Moore is president of the Club for Growth and a senior fellow in economics at the Cato Institute.



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