ARTICLE

Putting Leviathan in Perspective

We Need to Curtail Washington's Longstanding Spending Addiction

AUGUST 01, 1995 by LAWRENCE W. REED

“The Budget Is Out Of Control!” screamed the headline. “As if its sheer size and momentum had made it untouchable,” the writer declared, “nobody seems able to eliminate the waste that everybody recognizes.”

That may sound like a story that describes the federal government in 1995, but it actually comes from a cover story in Fortune magazine of 45 years ago. Published in 1950, the article went on to state, “By any sane economics, Congress should . . . unmercifully sweat down the $42.4 billion that Mr. Truman plans to spend in the year ending July 1, 1951.”

A dozen years and two presidents later, the federal budget was a few cents short of $100 billion. Today, at about $1.6 trillion dollars, the federal budget is still eight times larger than it was in 1950 after adjusting for inflation. Appropriations bills are commonly hundreds of pages long, in stark contrast to the very first one after the adoption of the Constitution, which was a mere 111 words.

Don’t let these figures slip by without comprehending the magnitude of their meaning. If the federal government were the same size today as it was in 1950, it would be spending 1/8 as much as it is—or about $200 billion. Does anybody out there really believe that today, we are eight times better governed, eight times better off, than we were 45 years ago?

We now have a government in Washington that practices forcible redistribution of wealth on a scale unprecedented in American history, makes war on private property, sacrifices the long-run good for the short-run “fix,” taxes and regulates beyond reason and then wonders why people don’t work as hard or produce as much, squanders billions on things that nary a soul would willingly spend a nickel of his own money for, and uses its power of the purse to bully the very people who earned the purse in the first place.

While the Congress grapples with the need to curtail Washington’s longstanding spending addiction, some partisans would have you believe that a massive, heartless bloodletting is taking place. Rarely will you see on the nightly news anything that even begins to put the gargantuan federal leviathan in perspective. If the American people were provided the information they need to fully comprehend how much government they’ve bought over the years, they might regard most current efforts to cut spending as rather timid. And I haven’t even mentioned the phenomenal growth of state and local governments.

Economist Stephen Moore of the Cato Institute recently assembled some impressive data on the growth of government and passed it on to the Senate Budget Committee. Government, he showed, is America’s #1 growth industry.^[1]

Moore advised the committee that more Americans today are employed by government than by the entire manufacturing sector of the U.S. economy. With all the money that local, state, and federal governments will spend this year, you could purchase all of the farmland in the United States, plus all of the assets of the 100 largest corporations in America. If the federal government alone were an independent economy in and of itself, it would be larger than the entire gross domestic product of every nation in the world except for Japan and Germany,

Incredibly, the $2.5 trillion that local, state, and federal governments will spend this year represents $24,000 per household in America. Adjusted for inflation, that’s up from about $13,000 per household in 1960. Moore asks, “Are government services twice as good today as they were in the 1960s? It is no accident that as government has grown larger over the past four decades, there has been a steady erosion in the percentage of Americans who trust government to do the right thing. In the 1960s, roughly 60 percent of Americans said they had confidence in government ‘most of the time,’ while today less than 25 percent do.”

The next time a brave soul in Congress suggests a spending cut, don’t be afraid. The budget cutters are starting out with a government so big that even if they had their way on everything, there would still be far more government left over than we had barely two generations ago. And somehow, back in those dark days of a mere $45 billion in the federal checking account, we survived. []

1. For an earlier discussion of this topic, see Stephen Moore, “The Growth of Government in America,” The Freeman, April 1993.