So I've been toying with this idea for awhile and
finally someone mentioned it in "print.""The significance of Obama's health legislation is more political than substantive. For the first time since Ronald Reagan told America government is the problem, Obama's health bill reasserts that government can provide a major solution. In political terms, that's a very big deal."
And that's what's been occuring to me over and over again. It's no wonder that Obama's stirring up so much smile, and that people are so exercised over his "agenda." His platform is a frontal assault on Reaganism, the core beliefs of which are so pervasive in our country as to be considered unquestionable truths about how the world works.
I'm in my mid thirties, and I can't think of a time in my adult political life when it wasn't a given that any expansion of government -- regardless of intent or composition -- was a bad thing. I can't think of a time where people who were on welfare weren't thought of as weak, or lazy, or as actively gaming the system. I can't think of a time when the free market wasn't considered a mystical self-regulating force that could transform us if we'd just let it be more . . . self-regulating. And as an addendum, anything government can do, private business can do better.
I was discussing the HCR bill with some of my contemporaries at work and there came a point where some of my "liberal" ideas just left them with their mouths agog. They couldn't believe I would support such a huge expansion of government, or give the welfare queens stuff they didn't deserve, or redistribute taxes. But all of these arguments -- while they may seem like common sense -- all stem from cultural assumptions that were born with Reagan. My contemporaries think it's self evident that these things are true; as people who've grown up with Reagan as a background, these aren't arguable, they're simply truths.
Only they aren't. They're ideological assertions. But we've been swimming in them for so long that we take them as simply the way things are.
You can see it in a certain type of Democratic congressperson (ahem, Blue Dogs, ahem) whose views are just a kinder, gentler form of being Republican. You can see it in Bill Clinton's presidency, where it became pretty evident pretty quickly that the only things he could get done were triangulations on certain Reaganist memes (ahem, welfare reform, ahem). This is one of the reasons I think the D's have been so tangled up and confused by their own power; suddenly they've been called upon not only to advance an agenda, it's an agenda that contradicts a lot of their core assumptions about the world (markets don't need regulating; government should be shrunk; deficits are bad; welfare is a pox; etc).
And I think this is why many people on the left consider Obama not just a promising president but something of a visionary. Not necessarily for what he's done -- though he's really starting to amass a pretty solid record -- but for what he represents, which is an ideological challenge (and possibly the death knell of) Reaganism. ie: government can be smart and even necessary; markets aren't perfect and need regulation; certain forms of government assistance can indeed be beneficial.
So, by your preferred economic model, how do we finance a burgeoning government expansion in a sustainable fashion? What happens when more people depend on the government for income than the private sector? How does the government create revenue by taxing it's own productivity? Those models have not proven succesful where they've been tried, like the former Soviet Bloc.
"Most of the studies of the optimum size of government made by reputable scholars in recent decades have indicated that total government spending (federal plus state plus local) should be no lower than 17 percent, nor larger than about 30 percent of GDP. In a just completed paper, economists at the Institute for Market Economics in Sofia, Bulgaria, have provided new estimates of the optimum size of government, using standard models, with the latest data from a broader spectrum of countries than had been previously available. Their conclusion is that there is a 95 percent probability that the optimal size of government is less than 25 percent of GDP.
Because most governments are - and have been for many years - larger than the optimal, there are insufficient data to give a point estimate as to the best size, other than it is less than 25 percent. Other studies have shown small-population homogeneous countries, such as Finland, may have slightly higher optimal government sizes than heterogeneous countries, such as Switzerland and the United States.
The ramifications of this study and previous ones are important for the current debate going on in the United States and many other countries, about having the government spend more to "stimulate" the economy - i.e. create jobs and increase growth rates.
Rather than increasing the size of government, the empirical evidence shows that sharply reducing taxes, regulations, and government spending down to at least 25 percent of GDP would do the most to spur economic growth and create more jobs over the long run.
There is virtually no empirical evidence - in the United States or anywhere else - to support the belief of economists of the Keynesian school that a big increase in government spending will make matters better, rather than worse. Economists of the Austrian school have, in general, supported smaller government as a way to achieve higher levels of both prosperity and individual freedom, and the empirical evidence shows them to be correct.
In the United States, periods of rapid economic growth, such as 1983-89 and 1992-99, have been associated with a reduction in the total size of government. During the 1970s and much of the last decade, total (federal, state and local) government spending grew to a post-World War II record (36 percent), and these periods were associated with lower economic growth. In recent decades, many European countries have greatly increased government spending as a percentage of GDP, and as a result most of them experienced lower growth rates and much higher rates of unemployment than the United States."
http://www.cato.org/pub_display.php?pub_id=9918
