NCPA - National Center for Policy Analysis

WANTED: SMALL GOVERNMENT

November 20, 2008

Up until the 1930s, the United States maintained a small federal government that mostly focused on the limited number of things the Constitution authorized it to do.  Americans were responsible for their own food, clothing and shelter, and believed in earning wealth.  What changed?  Well, in the 1930s, we didn't have a welfare state, says Terence Jeffrey, editor of Human Events.

According to the White House Office of Management and Budget (OMB), in 1930:

  • The federal government spent only 3.4 percent of gross domestic product, federal tax receipts equaled 4.2 percent of GDP and there was a federal budget surplus of 0.8 percent of GDP.
  • By 1940, with the election of Franklin Delano Roosevelt and his modern American welfare state, federal spending was 9.8 percent of GDP, federal tax receipts were 6.8 percent and the Treasury borrowed 3 percent of GDP to make up the difference.
  • The "human resources" part of the federal budget consumed 4.3 percent of GDP; in 2009, it will consume 13 percent.

Moreover:

  • In 2009, it is estimated that the federal government will spend 20.7 percent of GDP while taking in 18 percent of GDP in taxes, and the Treasury will borrow 2.7 percent of GDP, much of it from foreign creditors, to make up the difference.
  • And that does not count the $700 billion the Treasury will borrow to fund the financial industry bailout.
  • Today, the federal government eats up more than twice as much of our national wealth as it did in 1940 and more than six times as much as it did in 1930.

For the government to cover the gap every American household will need to put up about $455,000; the size of the mortgage the federal government has already taken out in the name of every American family.  So what have Americans gotten for this massive increase in government?  More of their life is mortgaged to the government, and they are more dependent on government, says Jeffrey.  

Source: Terence P. Jeffrey, "Now Much More Badly Needed: Small Government," Human Events, November 10, 2008.

For text:

http://www.humanevents.com/article.php?id=29369

 

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