Michelle Bachmann epitomizes the dishonesty and / or ignorance behind the "big government" debate:
"And what we saw this Tuesday, once the president signed the health care bill at the 11th hour in the morning on Tuesday, that effected 51% government takeover of the private economy," Bachmann said on Wednesday, during an interview with North Dakota talk radio host Scott Hennen. "It is really quite sobering what has happened. From 100% of our economy was private prior to September of 2008, but as of Tuesday, the federal government has now taken ownership or control of 51% of the private economy."
This is just blatantly false. From 2004-2007, public spending in the United States averaged 36.7% of GDP (PDF, page 5). The OECD (wealthy, developed democracies) average for that timeframe was 43.6% (same source). The reforms that have been put into place over the past year are projected by usgovernmentspending.com to increase public spending as a percentage of GDP in the USA to an average of 44.4% from 2013-2015, a time period which will be post-stimulus, post-TARP and, hopefully, post-mass unemployment. This will effectively bring the USA in line with the OECD average (although that average has likely increased since 2007, both as a result of growth in public spending in the USA, and because other OECD countries likely experienced an increase as a result of the recession).
Breathless exaggeration from the likes of Michelle Bachmann and other conservatives make it sound as though the public sector was invented whole cloth over the past two years. The argument of "big government" versus "small government" is portrayed in grandiose terms, rather than the actual frame of the debate over a 35% public sector on the right and a 50% public sector on the left. Or, to put it a different way, over the right-wing arguing for a 35% socialism that leans a bit more toward the military industrial complex, and the left-wing arguing for a 50% socialism that leans on single-payer health insurance.
Here is a graph of post-WWII public spending in the United States:
Even American conservatives are plenty socialist (if lemon socialist). Public spending as a percentage of GDP under conservative governance from fiscal years 2004-2007 averaged 34.9% according to usgovernmentspending.com, and 36.7% according to the OECD. Their collective conniption over moving the needle by about 7-9%, and bringing us in line with other wealthy democracies, is one of the most dishonest and / or utterly ignorant aspects of our national political discourse.
We are all frakking socialists. The question is just to what degree, and what kind.
Putting a price on all carbon, plus completely eliminating the income cap on Social Security taxes, are the two main keys to long-term progressive victory on the economy. Politically speaking, they are the easiest means to achieve the necessary level of government revenue for a balanced, new social investment economy that will allow us to escape the cycle of bubble and bust in which or country has been stuck for the past thirty years.
That is a big proclamation which needs unpacking. So, let me backup for a moment, and explain it in three parts. First, what is the new social investment economy? Second, how much revenue is needed to support it? Third, why is completely eliminating the income cap on Social Security taxes and putting a price on all carbon usage the best means of acquiring that revenue?
Explanation in the extended entry. Please check it out, because I think this is really a big deal.
Of course it's obvious that we do an aboslutely terrible job of keeping families with children out of poverty. We do okay in the marketplace, but once it comes to government policies, everyone else leaves us in the dust. We barely lift a finger.
But what I found a bit surprising (I hadn't realized it before) was that, for all our focus on single-parent families as a focus of attention regarding poverty, America's social policies are much less effective in dealing with poverty in two-parent families. Of course, it's true that poverty rates are much lower in two-parent families to begin with. But for any two groups of poor families, one with a single parent, the other with two, our social policies will lift nearly three times as many single-parent families out of poverty as two-parent families.
And this got me thinking about a recent comment--I thought it had been by Peter Beinart, but my quick Googling attempt failed--that liberals needed to be taught they, too could be wrong, just like conservatives, as they had been wrong about welfare reform. Now, of course, it's an article of faith in Versailles that welfare reform was a great success, that liberals opposed it, and that liberals were all wrong. But the chart above suggests, "not so much." So I decided to take a closer look at the recent trajectory of poverty rates. Tables of what I found on the flip.
As a country, we are on the brink of a substantial, long-term increase in social investment that will move our economy much closer to the mixed, and substantially larger public welfare models, of Canada and Western Europe.
While the arguments Chris marshaled are significant, and deserving of attention, I do not believe that they show what they promise, a "Long-term, Center-left Victory on Public Spending". But they do pre-position us for intelligently discussing, and eventually advancing that possibility. The reasons I say this are simple:
(1) Notwithstanding decades of movement conservative rhetoric, public spending does not necessarily directly equate with center-left politics. Increasing and destigmatizing public spending are helpful to center-left politics, but not necessarily synonymous to it.
(2) What is most significant is welfare state core spending-broadly speaking, spending on health, education, retirement and welfare.
(3) Also significant--though much smaller, and less easily identifiable in big-picture budget data--is what can be called welfare state periphery spending, primarily infrastructure and the environment.
(4) But a significant amount of government spending--along with other government activity--does not go to enhance the general welfare, and certainly not to help the disadvantaged. It goes to help those who already have a great deal of wealth and power, thank you very much.
Thus, I will argue, the task before us is to recognize beneficial government spending, and to support it, to recognize detrimental government spending, and to oppose it, and to discover new forms of government spending, or combinations of old forms that will be even more beneficial than those that already exist. The growth of government spending that Chris points to is potentially quite helpful. But that's only potential. It's up to us to ensure that the potential is realized. And to begin that process, we need to become more aware of how that money is already being spent, and with what consequences.
Let's begin by first taking a look at the broad spending categories, how they've varied over time, and how they're projected to change. Then let's compare the US welfare state with other examples, to see how well it functions, and how it could do better. The rest of this diary will be devoted to the first task. A followup will deal with the second one. In between, I'll post an interlude diary that will provide some background in terms of different types of welfare states.
STATE BLOGS
