We are all moderates
The US federal government currently spends about 21% of GDP. If John McCain wins the election and gets every single one of his economic proposals passed, the government would probably be spending about 18% of GDP when McCain leaves office. And if Obama wins and gets all of his economic policies passed, the government would probably be spending no more than 25% of GDP when he leaves office, and likewise if Clinton wins.
There’s a real, substantive difference between taxes and government services at 18% vs at 25%, but it’s a very modest difference relative to the range of government sizes among industrialized nations. The Swedish government, for instance, spends 53% of GDP, while the government of Singapore spends less than 10%. And in terms of the entire sweep of human history, the difference is more modest still. Sweden is neither the Soviet Union nor the Paris Commune, and Singapore is no 19th century United States.
I’d personally like to see our government spending closer to 10-15% of GDP, but as I’ve mentioned before, major changes to the level of government services would have to be phased in over a period of decades in order to avoid ruinous consequences to those who’ve paid into these services and who are counting on receiving the benefits thereof. If I were elected Emperor of the United States, my changes to the scope of government would be gentle and gradual, and I suspect the same holds for the vast majority of people who feel our government does too much.
Some of us here would like to see government services expanded towards the Swedish model, but you’re in a very small minority, too. And most of you don’t want to do it overnight any more than I want to make my desired changes overnight.
For all its flaws, the United States is a great place to live, and our political institutions have permitted centuries of relative freedom and prosperity. Just about all of us recognize this, and while we see things worth fixing, that doesn’t mean we want to throw out the parts that work.
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I can’t help but point out that if we just cut military spending in half, we’d be easily in the ballpark of what you’re looking for in terms of cutting government. And you know, in my callow youth (prior to being a stupid libertarian, I was a stupid lefty) I actually thought that was a good idea. Now, I don’t.
I actually find it irrelevant what percentage of the national income the government spends. Including on moral grounds. What I care about is what the standard of living is of the average person, including security in various forms.
I don’t know when it came over me, but it did: I no longer give a whit about the supposed moral standing of those government-created and sustained institutions known as “corporations,” nor do I believe that any human being “earns” the wealth accumulated by individuals like Donald Trump. This does not make such individuals, or institutions, evil, or in need of eradication, but I have no problem–none whatsoever–with regulating them and their behavior. And, since they clearly benefit quite disproportionately from the economic and legal climate that we as voters provide that even makes it possible for them to accumulate and preserve their wealth and power, it is absolutely acceptable to me to demand that they pay a disproportionate amount of our bills in the form of higher tax rates.
I refuse to use the term “little guy” as I find it highly offensive, but I think we have to be interested in the average person’s standard of living and security above all else. If a 30% tax rate on the wealthy and powerful gets us the best result, we do that; if a 99.99% tax rate on them gets us the best result, then they should damn well pay it.
I no longer make any apologies for that kind of thinking, and I’m often amazed at the inability of the left to simply say all of the above in clear and unequivocal terms that don’t actually involve class warfare or whiny rhetoric about the poor.
Heh. Now after that intemperate rant, I actually have to say I agree with you, those who want less government services and those who want more generally trend more toward the middle than radicals.
I think my core disagreement with you is that I’m more reluctant to resort to coersive policies. I’m not absolutely against coersion, and I see a lot of places where it’s necesssary and a lot more where it’s not strictly necessary but does produce the better result. But I am reluctant to tax the bejesus out of the Donald Trumps of the world.
Yes, they benefit more from the government keeping the peace and providing a legal system than the rest of us do, but even with a flat-percentage tax they would still pay much more in dollar terms than the rest of us, and due to the nature of voluntary trade they enrich their customers, employees, and suppliers in the course of generating their wealth. To triple-dip into the wealth they’re creating, by taxing them at a higher rate in addition to taxing their higher incomes and enjoying our consumer surplusses in order to fund programs that benefit us but not them doesn’t really strike me as fair. I can think of circumstances when it’s a necessary evil, but I don’t regard it as fair.
Tangentially, the definition of “rich” in politics is rather slippery. I’m no Donald Trump, but 8 years of Barack Obama would personally cost me about $15,000 in higher taxes, assuming he repeals the Bush tax cuts, uncaps the payroll tax, and raises dividend and capital gains taxes.
Do all of the countries with which you compared us also have state and local taxes, or some equivalent of the same? Because here federal spending and taxes is just a part of it, and most of the services that people get from the government are provided by those entities, not the feds.
State and local government spending in the US run about 10% of GDP, which puts the combined figure at about 31%. I got my numbers for Singapore and Sweden off of wikipedia, and I don’t know if they’re combined or purely federal numbers, nor do I know to what extent government services are divided between national and local goverments in those countries. Since Singapore is effectively a city-state, I suspect the national government covers everything.
Even at the 31% figure, my core point holds: even under Obama the US would have a much smaller government than Sweden, and even under McCain the US would have a much larger government than Singapore.
Just for fun, compare the 25% of GDP the federal government would spend under Obama with the 16% of GDP we spend on Healthcare. If, say, Obama were to oversee a 5% of GDP rise in Federal spending while presiding over a 10% of GDP deduction in healthcare spending, (assuming equal results– and most national-health care-having nations have better results than we do) we all come out ahead…
Thanks for the clarification and extra info.
Obama is not proposing a nationalization of the health care industry, or even the health insurance industry. He’s advocating price fixing, increased regulation, and means-tested subsidies for health insurance. This means that private health care spending might be reduced, but it won’t go away. Nor will the current federal spending on health care via Medicare, Medicaid, and SCHIP (currently about a quarter of the federal budget) go away.
I don’t think the assumption of equal results is a safe assumption. We don’t currently have a free market health care system; we have a privately owned and operated but heavily regulated and heavily subsidized health care industry, and Obama’s plan will keep the current form but increase the level of regulation and the level of subsidy. It won’t make our health care industry resemble France’s (a government-run no-frills PPO supplemented by unregulated and unsubsidized private insurance) or Switzerland’s (mandatory purchase of private insurance) or the Netherlands’ (mandatory purchase of private insurance, with a government-run reinsurance program).
I would agree that corporations are not people and thus don’t have rights. They have the priviledges that society deems beneficial. However, corporations don’t pay taxes. Corporate taxes are calculated as operating costs and are built into the price of goods. All you do by taxing corporations (or any business for that matter) is drive up the price of goods. Which are disproportionately borne by the poor as the single mom pays the same amount of Wal-Mart’s taxes on the bicycle as the married doctors.
And PunningPundit, I think you’ll find that in practice your 5% and 10% are backwards.
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My problem with increased government spending is a practical one: The more money the government allocates to itself the less money is available for private use. Government agencies, like anyone else, tend to be very jealous of their authority. Given the chance, they’ll outlaw, starve out, or attack private initiatives that compete with their own goals. I think school choice is a perfect example of this. They usually regard alternatives as attempts to bypass their authority, not as necessary competition.
Government-run systems also tend to be monolithic, wasteful, and easily hijacked. Substantive policy decisions are made slowly, and often in secret, and once established they resist changes even if their data is wrong. Agriculture subsidies, for example, have screwed up farming practices and consumer prices for decades, but there’s no real prospect of reforming them.
And, from all I’ve seen, government-run health care systems fail badly at innovation. There don’t seem to be many pioneering new treatments, technologies, or drugs coming out of Canada or Sweden.
bcostin’s last blog post..?We need more white people.?
I can sort of agree with all that, Bcostin, except from what I’ve seen large corporations match the following description perfectly, word-for-word:
Given the chance, they’ll outlaw, starve out, or attack private initiatives that compete with their own goals.
They usually regard alternatives as attempts to bypass their authority, not as necessary competition.
…also tend to be monolithic, wasteful, and easily hijacked. Substantive policy decisions are made slowly, and often in secret, and once established they resist changes even if their data is wrong.
And I won’t even get into incidents where I’ve seen corporate bureaucracies stifle innovation.
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