Thirty years ago the economic debate between Democrats and Republicans was framed in terms of the case for bigger versus smaller government. Democrats emphasized market proclivities toward monopoly and inequality, failure of markets to efficiently provide public goods, market incentives to pollute, and above all the tendency of markets to produce less than full employment. Republicans countered that such market failures were over-stated. More importantly, using government to solve market failures could lead to even worse problems of government failure associated with bureaucratic inefficiency, policy misjudgments, and private capture of regulatory agencies. In an imperfect world, Republicans argued that it is better to live with the problem of market failure and opt for small government, than try and solve it by resort to big government.
This bigger versus small government debate was one of real substance, with strong arguments on both sides. Though differences were sharp, all agreed on the need for “good†government. But a funny thing happened on the way to the forum. Over the last three decades the Republican Party has morphed from a party of “small government†into an “anti-government†party. This morphing has had profound political consequences. Whereas the party of small government favored good government, the anti-government party actively promotes bad government knowing that it feeds popular anti-government sentiment.
The drift toward bad government began with the Reagan budget deficits of the 1980s. Conservatives had historically been against large budget deficits, calling themselves fiscal conservatives. Indeed, a core complaint against bigger government was that it promoted over-spending and large deficits. However, the Reagan era introduced a new political line whereby massive budget deficits could finance short-term political gains while simultaneously imposing long-term financial handcuffs on government.
In the short-term, large spending programs (such as weapons procurement and highway construction) reward the political base. At the same time, large deficits rack up large government debts on which interest must be paid. These interest payments continue long into the future, thereby pre-committing future tax revenues and leaving less room for future discretionary spending. Moreover, the interest accrues to bondholders who belong disproportionately to the Republican base. Lastly, such pre-commitment is especially potent if deficits are racked up at a time of high interest rates, as happened in the 1980s.
The same logic that encourages anti-government advocates to push irresponsible spending policy, holds with even greater force for tax policy. Tax cuts usually go predominantly to the well to-do because they have the income and pay top tax rates. However, this skewing is profoundly worsened when the focus is cutting taxes on unearned income (interest and dividends) and wealth transfers (the estate tax). Additionally, tax cuts worsen the budget deficit by reducing revenues, thereby tightening the financial handcuffs on future spending policy. Most pernicious of all, there is an incentive to push bad tax policy, and even the most complicated poorly designed tax cuts are deemed desirable. They too reward the political base and handcuff future policy. But they also fuel resentment of the tax system, strengthening popular anti-government sentiment.
All of the above features have been clearly visible under the Bush administration. It has pushed grossly inequitable tax cuts, and created large structural budget deficits. At this stage of the business cycle, the budget should be close to balance. Instead, it is stuck around three percent of national output, which promises to sabotage future government finances. The budget has become a pork barrel, exemplified by the Medicare drug benefit. Rather than looking for the simplest most cost effective way to provide a drug benefit for seniors, the administration chose a complicated costly scheme that bars government from using its size to get discounts, limits price competition and rewards the pharmaceutical companies who are part of their political base. If one were absolutely cynical, it is even possible to view incompetence and misconduct in high places as logically fitting in with the anti-government agenda. Such behaviors discredit government and undermine public trust.
Restoring the sensible bigger versus small government debate of the past calls for outing the “soft treason†of the anti-government agenda. But there is a strange irony to this unhappy tale. While the small government Republican Party was morphing into an anti-government party, an important segment of the bigger government Democratic Party was morphing into small government Democrats. That means the old small versus big government debate between Rockefeller Republicans and Kennedy Democrats is now played out between right and left of the Democratic Party, which explains why Democrats are so divided. It also means that Democrats need to recapture confidence in their historic political identity as much as do Republicans.
MMMM???
If you promote anti-government sentiment, undermine public trust and handcuff the governments finances, how do you project power in the world over the long run? Seems like the power projection is a republican mantra but their actions now are going to make it harder in the future to achieve that goal. That may even be occuring now as the military is having a harder time in recruitment.
Thanks for capturing the weird evolution of “anti-government thinking.” As a DOE employee, I am bewildered by this strain of thought among some coworkers. It is as if they deliberate set up themselves (and their own lack of initiative) as case studies for why government won’t work. Thankfully others are more inspired . . .
I am a union employee. I have voted Republican in the last two elections. What some call the sabotaging of government, I call the weaning of Americans off of government dependence.
This country was founded on, always has ran, and currently does operate under a psychology of Capitalism. Intentionally. Lest we forget our past and return to the socialistic psychologies of Europe. Policies which, by the way, caused us to leave Europe in the first place in search of a new life that depended less on government.
As I read “Sabotaging Government”, what jumped out at me more than anything else in the article was the “hand wringing” extolled by the author over how we are falling victim to Government.
Unlike when we left Europe, our victimization to government is expressed here in Governments “failure” to act. In Europe our victimization to government came through Government’s failure to restrict it’s actions.
Were we dependent on government while in Europe? The one’s who stayed and are still there most certainly were and still are. The “ism” is known as “Socialism”.
While those who carry pro government stances in their psychologies of socialism, see the direct benefits of government intervention and rule, they quickly forget the inherant evils that placate the other side of the coin. Inherant evils that ultimately led to the creation of this Capitalist society in which we now find ourselves.
The grass is always greener on the other side. And that’s an understandable mistake when one has never been on the other side. However, to have seen and walked upon the brown grasses of socialism in the past, and to assume that those grasses have greened is not only a mistake, it is to ignore the lessons of the past.
The degree in which government seems to be failing us is in direct relationship to the degree in which we depend upon it to cause our success.
Those who pull the pacifier from the mouth of their two year old (and most do), understand that while the pacifier certainly meets a need in the child’s security, it is not the “pacifier” that a parent wishes to be the object of their child’s security. The pacifier, if left in too long, can and does create an unhealthy dependence that limits the childs growth psychologically and the damage far outweighs any gained benefit provided by the pacifier. Would we go as far as to say that the parent has sabotaged the pacifier when they remove it? Will the child be angry? Of course he will. It removes his security. He has to find within himself a security he has never known because of his dependence.
Government, even at it’s best, will most definately fail us if we look to it for our success. Why? Because it was never designed to fulfill such a daunting task. And our failure to morph government into something it was never designed to accomplish is in itself a futile and frustrating endeavor.
As JFK once said, “Ask not what your country can do for you, but instead ask what you can do for your country.” Hmmm… a democrat who understood the past. Understood the present government. And understood the healthy interaction required between a people and it’s government for a prosperous future.
While the prospects of the future in this global economy are limitless and unknown, the past stands as a marker of what direction leads to failure. To ignore those markers is to repeat the same mistake. And like a dog that returns to it’s own vomit, so it is with a fool who repeats his folly.