It's Not a Welfare State, It's a Special Interest State

June 29, 2012

The problem with the welfare state is that the concept of "welfare" has become an open, bottomless vessel into which every desire can be poured: government takeover of the entire health and retirement systems; detailed regulation of employment; manipulation of money; subsidies for housing, education, energy, food; or anything else that strikes the fancy of some segment of the public, says author James V. DeLong.

This is evidenced by the rapid growth of government over the course of the last century. As the public's understanding of the role of government expands, so too does government action as it moves into more spheres of citizens' lives.

  • In 1902, U.S. federal, state and local governments spent less than 7 percent of the gross national product (GNP).
  • Most (3.5 percent) occurred at the local level, while states spent 0.76 percent and the federal government controlled 2.71 percent.
  • Now, total federal, state and local government spending in the United States is about 42 percent of GNP.

This growth is a function of the actions of special interest groups, which learned long ago that handouts are easy to come by when they are at the expense of the taxpayer.

Furthermore, the growth of government contributes to compartmentalization and division of responsibilities. As a consequence, central oversight is neglected and the government bureaucracy is left even more vulnerable to future special interest efforts. These efforts usually manifest themselves in sweeping regulatory actions that should seem familiar to modern citizens.

  • The Environmental Protection Agency's ambitious regulations, which is informed by a concentrated push from environmental special interest groups.
  • The rapid expansions of Medicaid and Medicare have returned incredible profits to health care special groups.
  • The finance reform passed by the Obama administration was 2,000-plus pages of complicated regulations and rules, each of which was urged by one interest or another.

Source: James V. DeLong, "It's Not a Welfare State, It's a Special Interest State," American Enterprise Institute, June 14, 2012.

For text:

http://american.com/archive/2012/june/its-not-a-welfare-state-its-a-special-interest-state

 

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