Democracy, Liberty and Big Government

The Republicans won a big victory on November 2nd. Will they be able to do anything constructive in reducing the growth (or more particularly the size) of government? I don't think so. Already, the establishment is reluctant to cut out earmarks. Sen Inhof from Oklahoma has some distorted argument about Congress doing the spending rather than the President, but it is more likely that Inhof is a big earmark spender. Although total earmarks are not large relative to government spending, they are extremely important on the margin -- their symbolic role is large.

The debt commission came out with some good proposals -- moving in the direction of privatiing social security and medicare (although they suggested moving far too slowly), reducing corporate taxes (although the decrease from 35% to 26%, the middle of industrial nations is too high still), reducing home mortgage deductions (for mortgages greater than $500,000 (too high, all such deductions need to be eliminated), reducing subsidies particuarly agricultural subsidies(this is absolutely necessary but will be very difficult to implement). What they should also have proposed was to eliminate several departments and return the U.S. to pre-Great Depression structures. Wliminate departments of education, energy, etc.

Unless very bold steps are considered, marginal steps will not be undertaken. We have to recognize that history is not favorable toward reducing size of government and the welfare state. In "The Future of Freedom" Fareed Zakaria points out that lobbies have existed for most of American history. Their explosion since the early 1960s is a result of the government becoming much bigger. "For conservatives it [more lobbyists] means that the goal of reducing federal spending has become a hopeless case." p. 175. In eight years Reagan was able to close only four government programs of any note. In 1994 Newt Gringrich and his freshman horde came to power on a contract with America to changing the way Washington worked and reducing subsidies. Four years later, the Republican revolution was in shambles, Gingrich had resigned, and Washington was not changed.

As Zakaria notes, the Republicans began in 1995 with a budget proposal that would have eliminated about 300 programs, mostly corporate welfare, saving more than $15 billion. Then the lobbying began...." p. 176 The budget that was finally passed had total reductions of $1.5 billion. Thus, start huge and end with significant marginal cuts.