That is how Dan Mitchell describes America’s fiscal evolution, as chronicled in a new report by the Joint Economic Committee. I will have to delve into the report before long, but for now let’s stay with Mitchell’s analysis:
Given my affinity for budget data, I was excited to learn that the Joint Economic Committee (JEC) just released “An Economic History of Federal Spending and Debt.”
This new publication is filled with fiscal information starting in the late 1700s.
To give you an indication, check out this chart which, in one fell swoop, provides more than 200 years of data on spending, revenue, and debt, along with information on major wars and economic dislocations.
Click to enlarge:
You could study that one for a while. Dan offers this simpler chart, which shows federal spending as a percentage of GDP:
It is obvious that federal spending since WWII represents a sharp break with our prior history. Mitchell comments:
it symbolizes a very unfortunate change in the attitude about the proper role of the federal government.
A progressive philosophical shift in federal spending began under President Woodrow Wilson. …George Will—writing on Wilson’s underlying philosophy—succinctly contrasted Wilson with James Madison by noting, “Wilsonian government, meaning (in Wilson’s words) government with ‘unstinted power,’ is hostile to Madison’s Constitution, which, Madison said, obliges government ‘to control itself.’”
In other words, the left decided that government was a force for progress rather than a threat to liberty, so they wanted to undermine the Constitution’s limits on the federal government.
And once the Supreme Court acquiesced to this perversion of the Constitution’s clear intent, any limits of federal power were swept away (evinced most recently by John Roberts’ tortured Obamacare decision).
I can’t argue with that. But I would note a couple of additional points. First, the growth of federal spending has consisted mostly of expansion in entitlements, which now represent around half of the federal budget. Does taxing the young to support the old–not a traditional federal government function, to say the least–give the government the same control over the economy, or threaten our freedoms, to the same extent as other forms of government spending (e.g., funding the EPA and the IRS)? Unconstrained entitlement spending may essentially bankrupt the federal government one day, so I don’t mean to underestimate its importance. But are all forms of government spending equally “Wilsonian”?
Second, the explosion in federal spending has taken place alongside a similar expansion of state and local spending. I happened to obtain data last week on historic spending by my home state of Minnesota. The numbers are actual totals, not inflation-adjusted and not stated as a percentage of GDP. Still, the raw numbers are astonishing.
In 1960, the State of Minnesota spent $509 million. At the time, it probably sounded like a lot of money. By 2015, the state’s spending had exploded to $35.9 billion–more than 70 times the 1960 level. Just since 2000, the state’s spending has doubled. And this is without Social Security and Medicare driving the numbers.
Together, these trends have largely turned the United States into a nation of check-cashers. Small wonder that is seems harder, these days, to get people upset about big government. But government spending always carries a price tag, as the Joint Economic Committee’s report notes:
While more spending and a bigger federal government can mean more federal jobs, these jobs come at the expense of private sector resources, meaning fewer private sector jobs and lost economic opportunities. …there is an inverse relationship between federal spending and private payroll employment.
Whether concern about foregone growth can compete with the tangible reality of a government check–at least until the money runs out–remains to be seen.
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