NCPA - National Center for Policy Analysis

Government Gone Wild

January 14, 2011

Russian President Dmitry Medvedev recently signed a decree that will cut 20 percent of federal officials by 2013.  The measure could save up to 40 billion rubles ($1.3 billion) out of the Russian federal budget, says the Daily Caller.

The United States, despite an unequivocal message sent by the electorate, continues to spend.  For example, the "ObamaCare" entitlement was passed (over the wishes of the public), even though other entitlements are insolvent.

Why this behavioral divergence between the two governments?  Has Russia suddenly become more capitalist than the United States?  Are they more responsive to their citizens?  The answers reside in history, says the Caller.

  • The Russian government knows scarcity -- for 90 plus years, it dealt directly with (and created) shortages; communism made the government virtually 100 percent of the economy;economic problems by definition were its problems.
  • U.S. government began small with few responsibilities --the private economy produced unprecedented wealth and income;the U.S. economy grew to become the largest in the world, with a standard of living unmatched.

The different reactions of the two governments can be traced back to these origins.  The Russian government started out as both governor and employer.  When something went wrong, it was responsible.  The U.S. government, on the other hand, started as a "night watchman."  If something went wrong, it was someone else's fault and provided an opportunity for government growth.  Any perceived problem became an excuse for government aggrandizement and the shifting of more resources away from the productive sector, says the Caller.

  • Once begun, government growth was furious --total government spending in 1913 amounted to less than 5 percent of gross domestic product.
  • Today, it approaches 45 percent.
  • In real terms, the U.S. government grew 160 to 170-fold, nine to 10 times faster than the private sector.

Source: Monty Pelerin, "Government Gone Wild," Daily Caller, January 10, 2011.

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