Budgets and the ugly prom queen

When the subject of government spending arises, one of the approaches folks on the left have adopted of late is to claim that U.S. government expenditures “really aren’t that high.” Take, for example, New York magazine’s Jonathan Chait. His recent article on the Republicans’ reticence to propose spending cuts is premised on the idea that “spending cuts aren’t there because they can’t be found.” Mr. Chait claims that Republicans cannot offer the president a list of spending cut proposals because, once you do the math, the usual suspects that enter into the discussion – foreign aid, defense spending, and the like – don’t do enough to move the budgetary needle. In other words, even if we severely cut all of the items usually mentioned in the conversation, we are still left with a yawning budget gap. Additionally, such cuts would exacerbate the already-low level of government expenditure on items like infrastructure, retirement, and education.

Mr. Chait and those like him are right about a few things, but are terribly off base on a few big things that matter. First, the notion that the U.S. federal government is a cheapskate when it comes to things like infrastructure and education is faulty on many different levels. Those who make this argument typically try to do an apples-to-apples comparison of U.S. budgets with those of western Europe and Japan. And when you do a simple comparison, the data do seem to indicate that the U.S. spends far less per capita on certain kinds of things; however, one should also factor in the fiscal health of those countries used in the comparisons.

Mr. Chait claims:

“The United States spends way less money on social services than do other advanced countries, and even that low figure is inflated by our sky-high health-care prices. The retirement benefits to programs like Social Security are quite meager. Public infrastructure is grossly underfunded.”

Again, the simplistic view of the data might lead one to think we are underfunding vital services by comparison, but you have to factor in how those “other advanced countries” are faring. Just last month, The Economist published a special report detailing how France – presumably one of the countries Mr. Chait so admires – is the “time bomb at the heart of Europe” because of the country’s unsustainable fiscal policies and mounting public debt. Scratch the surface of any western European country, even Germany, and the problems are much the same in varying degrees. Too much spending, too little growth and a tax burden that is positively onerous. But Eurosclerosis is not confined to Europe. Japan is in similar straits, as public debt continues to pile up to levels that, honestly, they’ll never pay back. If we were to adopt similar levels of public spending across the board, it would be hard to fund such a government even with Eisenhower-era tax rates.

Yet Europe is the prom queen that progressives would have us emulate?

When viewed in this way, it is clear to me that the current debate is about the limitations of government more than anything else. Progressives seem to continuously compare the current state of affairs with what could be done if the government’s ability to confiscate other people’s money were limitless. Imagine the roads and schools we could build! Imagine the bounty of our Social Security system!

Since 2000, the U.S. population has grown by about 12%. Over the same period of time, government outlays have increased 96%. Since 2000, U.S. gross domestic product has increased 35%, that despite a massive financial meltdown. Even if one were to concede that higher taxes are necessary – and I do – the notion that the spending line of the budget is just fine is ludicrous. Over the past 13 years, what have we gotten out of doubling the size of government? I mean, other than a public debt pile that is now larger than our annual gross domestic product?

The fact that neither party is willing to discuss the specifics of spending cuts may be some kind of game or negotiating tactic, as Mr. Chait suggests, but to suggest that spending cuts aren’t happening because there’s nothing to cut is delusional at best. It’s cowardice, pure and simple.