The myth of big government

By Mike Tudoreanu

This election season, we’ve been hearing non-stop claims about how the government is supposedly growing out of control and needs to be restrained. However, we almost never hear any actual numbers to go with those claims. What exactly has been growing? How much has it been growing? Where do we stand now compared with the past? The silence on these questions is deafening. So let’s look at the facts. There is no single established way to measure the size of government, but the three most commonly used measures are tax rates, government spending (as a share of GDP), and the percentage of people employed by the government out of the total labor force.

If we measure the size of government based on tax rates, then the federal government has been shrinking radically and continuously. Taxes have been steadily declining for decades, especially for the rich. The top income tax rate (paid by the rich) was at its highest – 92 percent – in 1951-1952. After that, it fell to 91 percent, and stayed that way until 1963. Then it was gradually cut to 70 percent, and remained there throughout the 1970s. Under Reagan, it was 50 percent. Under Clinton it was 39.6, and then Bush cut it to 35 percent. Obama has kept income tax rates at Bush-era levels. In fact, the absolute richest of the rich are paying even less than that: the 400 wealthiest Americans paid about 26.8 percent of their income in taxes in 1992, compared to a mere 16.62 percent today. So the idea that taxes have grown too high is not just false; it is in fact the precise opposite of the truth. The last president who significantly increased taxes for the rich was Harry Truman. The long-term tax trend has been downhill ever since.

In terms of government spending, the decline is much smaller – but there is still a decline, at least from 1980 to the present day. Total government spending in 1980 stood at 21.7 percent of GDP. In 2009 it was 20.7 percent. By the way, if you’re wondering where the deficit and debt come from, they have a lot to do with the fact that taxes have been cut so much more than spending. Next, if we look at government employment (state and federal), we see another slow decline. The government employed 18.08 percent of the workforce in 1980, compared with 17.22 percent in 2009. So if we measure the size of government by these standards, then it has only shrunk a little bit in the past 30 years. But the point is that it certainly hasn’t grown.

One way or another, no matter how you measure it, the fact is that the US government has been shrinking since 1980 (and perhaps even since the 50s, if you look at taxes). The only question is whether it shrunk a lot or just a little.

Conservatives may argue that Obama has stopped or even reversed this shrinking trend. I doubt it, because he has not raised income taxes. But even if Obama did reverse the trend, we still have a smaller government now than we did under Reagan, and it will take a long time to get back to pre-1980 levels – let alone anywhere beyond that. So the Tea Party hysteria about big government is utter nonsense. They are entitled to their own opinions, but not to their own facts. If they want to argue that the US government is still too big for their tastes – in other words, that it hasn’t been shrinking fast enough – fine. That is an opinion. But if they say that the US government has grown much bigger than in the past, that is not an opinion. That is a lie.

Mike Tudoreanu is a Collegian columnist. He can be reached at [email protected]