“What if we can’t make government smaller?” the Niskanen Center’s Will Wilkinson asks. He says that the evidence, particularly Wagner’s Law, shows that government spending is impervious to political assault, and libertarians should make their peace with big government. Instead, libertarians should focus on reforming regulations to foster competition and the market process.
I have a different read of the evidence from Will’s. At the Learn Liberty blog, I write,
Governments do have a tendency to grow. However, the U.S. has cut government consumption significantly in the past and could do so again. The drivers of welfare spending are the aging of the population and rising health care costs, not political support for new programs.
I support those claims with a series of charts. Check it out!
3 thoughts on “Can Government Spending Be Cut After All?”
Interesting, Jason.. have you mapped the costs of government consumption WITHIN the social services (human resources on Will’s chart I think) spending?
Basically, government consumption within Social Security, Medicare, & other transfer programs would be the administrative costs of those programs. Those administrative costs are actually pretty small. For instance, the SSA budget is $12 billion, but they spend over $900 on transfers: https://www.ssa.gov/budget/ . Administrative costs are a bit higher for Medicare. But most government consumption comes from the employment-intensive functions of government like education and defense.
If government did not waste so much taxpayer money on things like funding Planned Parenthood and waging a war on drugs or poverty, taxes could be much lower across the board. Democrats want to raise taxes on the poor, the middle class and the rich. Republicans want tax rates to be low for everyone.