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Big Vs. Small Government is Wrong Argument

by John on 05/04/2013

Too many discussions today devolve into whether you’re for big or small government.

But as I will point out here: participating in a Big vs. Small argument avoids the right questions and the right answers.

So, let’s stop.  Instead, let’s argue for efficient government.

Here’s why.

The argument only helps:

  • Democratic and Republican Parties raise money
  • Cable news to create more heat than light while getting those campaign dollars
  • Special interests that was us to avoid the real problems. 

The truth is both parties are responsible for the bloat in government.  Ironically, more government excess has occurred under Republican presidencies.  And the higher amount of government payments goes to states, counties, and voting districts that vote Republican.  This is from the book Nation of Takers which I highly recommend.

… in 2010 the most extreme county-level dependence on government transfers tended to be in rural areas rather than urban ones, and in red states rather than blue states. … in fact, two-thirds of the one hundred most dependent counties in America voted for the Republican rather than the Democratic candidate in the 2008 presidential election.  Thus we can see another particularity of daily life in many reaches of entitlement America: to wit, the methodical arrangement of personal affairs to draw growing support from public transfers by many of the very people who are unselfconsciously professing to prefer a smaller American government.

Although this is an indictment of Republican hypocrisy, we should embrace Republicans who want to change this thinking in their own party.

At the same time, Democrats should drop the 47% gotcha moment of Mitt Romney.  The truth is 49% of American families get some government assistance or payment, according to Nation of Takers.  Instead of demonizing those Americans for political gain, we need to get people off this unsustainable course while making sure they’re taking care of themselves while we grow the country’s economy.

The underlying problem of government bloat is crony capitalism.  Special interests – like AARP and the military industrial complex — rule.

AARP takes advantage of our aging nation.  Ten thousand baby-boomers retire every day while we don’t have enough new workers to keep up with payments into our entitlement programs. 

What’s worse, a recent study says only 13% of workers are confident about their retirement.  Nearly 50% are either not at all confident or not that confident.

So, as people age and become more vulnerable they will most likely rely MORE on government.  Plus, baby-boomers will remain a major demographic – that votes.  That provides power to AARP that can influence elected officials with money.

On the other side of the government trough is the military industrial complex.

David Stockman outlines this in his new book, The Great Deformation.  I don’t necessarily agree with his solutions, but he’s right on the economic causes.

His best argument is the amount of money we’re still paying to fight the Soviet Union in the 1970s when our enemy is a bunch of insurgents in various parts of the world.  Even the military says it doesn’t need some of the fighter jets.  But Congress pushes the expenditures through because they’re on the dole from military contractors and they believe it’s a jobs program for their region.

A number of reports say we were spending $300 million a day in Afghanistan.  Other reports say we spend $1 million/day on all service members.  Yet, we will be paying for decades on the retirement and health costs for these service members.  And we seem to be stationed in geographical regions where we want to make sure we keep oil flowing and less costly — at a time when we’re becoming energy independent.

Another factor hitting us hard is technology.  It’s wonderful and it’s becoming easier. But it is also eliminating jobs.  Soon there will be software that can write things like this or cut hair.  What do writers and hair stylists do?  We need these people to be re-educated to find jobs so they can contribute to society.  That solution does not need small government.  It needs investment.  Yes, we can encourage businesses to train workers for these jobs.  But we have to encourage them so that investors and shareholders don’t  feel as if they’re footing the bill; they want profits from sales and tight budgets.  It can’t just come from entrepreneurs.

Government will have to keep up – not bow out.

Government has to be there but as a solid financial bulwark.

There is a solution.  It’s called Simpson-Bowles.

I haven’t even touched the cronyism that has led to a lack of competition in banking, the media, the food and agriculture industry, and energy.

Informed Not Inflamed Take-Away:

We need new thinking to reduce the government so it can invest in our future and to keep us strong.

Participating in a Big vs. Small argument avoids the right questions and the right answers.

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