Wednesday, March 3, 2010

We need a smaller government

I've long been a supporter of the Cato Institute. Nearly everyone that works there is outstanding in his or her field. They are one of the most successful think tanks in the country because they stand for the principles of limited government, individual liberty, and free markets, and they know how to articulate their positions clearly and effectively. Here's an excellent recent example from Cato's Chris Edwards, entitled "Six Reasons to Downsize the Federal Government:"

1. Additional federal spending transfers resources from the more productive private sector to the less productive public sector of the economy. The bulk of federal spending goes toward subsidies and benefit payments, which generally do not enhance economic productivity. With lower productivity, average American incomes will fall.

2. As federal spending rises, it creates pressure to raise taxes now and in the future. Higher taxes reduce incentives for productive activities such as working, saving, investing, and starting businesses. Higher taxes also increase incentives to engage in unproductive activities such as tax avoidance.

3. Much federal spending is wasteful and many federal programs are mismanaged. Cost overruns, fraud and abuse, and other bureaucratic failures are endemic in many agencies. It’s true that failures also occur in the private sector, but they are weeded out by competition, bankruptcy, and other market forces. We need to similarly weed out government failures.

4. Federal programs often benefit special interest groups while harming the broader interests of the general public. How is that possible in a democracy? The answer is that logrolling or horse-trading in Congress allows programs to be enacted even though they are only favored by minorities of legislators and voters. One solution is to impose a legal or constitutional cap on the overall federal budget to force politicians to make spending trade-offs.

5. Many federal programs cause active damage to society, in addition to the damage caused by the higher taxes needed to fund them. Programs usually distort markets and they sometimes cause social and environmental damage. Some examples are housing subsidies that helped to cause the financial crises, welfare programs that have created dependency, and farm subsidies that have harmed the environment.

6. The expansion of the federal government in recent decades runs counter to the American tradition of federalism. Federal functions should be “few and defined” in James Madison’s words, with most government activities left to the states. The explosion in federal aid to the states since the 1960s has strangled diversity and innovation in state governments because aid has been accompanied by a mass of one-size-fits-all regulations.


alstry said...



I think Bunning was the last chance America had at limiting spending....but he caved like all the other spineless worms.

It just goes to show you the true nature of our Ponzi economy...we can't pay doctors unless government borrows, we can't pay unemployment unless government borrows, we can't pay federal workers unless government borrows.

If you think about it, much of the income tax receipts government currently receives is a directly due to government borrowing and paying salaries it can't afford while private citizens lose their homes under similar circumstances.

Why the jokers in Washington still receive salaries is a sad comedy as millions across the nation who own businessws or are independent contractors get nothing when confronted with the same circumstances.

septizoniom said...


Benjamin Cole said...

Hear, hear.

Of course, calling for smaller government is the easy part.

Which of the following departments or programs do you want to whack:

Department of Defense, USDA, VA, Commerce, Interior, Homeland Security and debt. I just described federal spending that consumes 70 percent of income taxes.

The huge entitlement programs are largely financed by payroll taxes.

Cato Institute does have one scholar, Doug Bandow, who calls for 50 percent cutback in federal military outlays, and closing down offshore military bases.

I see the latter idea getting exactly zero traction in right-wing circles (aside from Ron Paul, an interesting fellow), along with wiping out the USDA. Or the $8 billion in annual subsidies to rural phone systems. Rural airports. Rural highways, power systems, water systems.

In short, the Red Ink Republicans, Red State Socialists and militarists are in complete control of the Republican Party.

The Deficit Democrats may be worse, or maybe not. Clinton was better, but it looks like Obama will be worse.

Good luck USA.

Paul said...

I see Benji is starting to grudgingly realize it wasn't smart to vote for the cool guy. He's still pretending not to see an overall diff between Republicans and Dems, however.

We could make a serious dent in the deficit by cutting federal employees and outlawing unions in the public sector. Also, get rid of worthless bureaucracies like Dept of Education, Labor, Commerce, HUD, Energy, Ag, Interior, NASA.

We could start drilling our own oil, a free lunch initiative if there ever was one.

According to Wikipedia, we are spending $571 in "other mandatory programs" this year. What the hell is that?

Benjamin Cole said...

In terms of deficit spending, verily, show me the difference between the two parties, and name for me the Republican President who last even proposed a balanced budget.

A clue: His name starts with an "E," and he was extremely competent general in WWII.

Oh, maybe it its just me, but I think voting for one party for 50 years and hoping for a balanced budget is too long to wait.

Try voting for Ron Paul.

W.E. Heasley said...

Points 1-6 are excellent!

The list almost looks like a definition of the views of two particular fellows: Thomas Sowell and Walter E. Williams. That would be the two man wrecking crew that could limit size and scope of government! Plus the progressives couldn’t argue with them as they would tear the progressives to shreds in a debate.

Paul said...

"In terms of deficit spending, verily, show me the difference between the two parties"

Here you go.

Thanks much to people like you who voted for Mr Charisma. And then you have the nerve to go insult us as "Red ink Republicans."

"..and name for me the Republican President who last even proposed a balanced budget."

I'll quickly concede alot of Republicans have spent too much money on failed Liberal programs. But there's a big difference between misdemeanors and felonies.
Bill Clinton happened to be President during a perfect storm of the Gingrich revolution(he blamed the '95 budget shutdown on the "extremist" Republicans, if you will recall), the technology\Y2K bubble, and the sweet spot of the business cycle. He did moderate from his '92 campaign promises, but only after he took a beating in the '94 Congressional elections. Bob Dole would have run a surplus too if he had won in '96.

"Try voting for Ron Paul."

Voting advice from the guy who voted for Barack Obama. I'll keep that in mind while we observe him running up trillion dollar deficits.

Anonymous said...

Yeah we need a smaller government, more freedom... but have a close look around the world. We face a re-birth of growing governments.

Scott Grannis said...

Ed: Actually, the huge growth of governments around the world is old news. What's new is that we are finding out about all at the same time. What's good is that people are really getting focused on this, and they are getting very upset. The big news will come if and when the people start fighting back and government starts shrinking. I think it's almost inevitable. So on the margin this will be very positive, even though it is very depressing to realize how big government has gotten.