Sunday, March 01, 2009

But Now You're Back Here, Baby

Republican Rep. Tom Price (R-GA) "The era of big government is clearly back."

Why, I never realized it had left in the first place. I'd be fascinated to see Rep. Price's voting record over the last three years, to determine just how recent a vintage this concern over deficits really is. For example, it would be very strange for a deficit hawk to vote against the 2007 pay-as-you-go resolution (H. Res. 6).


Cycle Cyril said...

Both you and Price are confusing two separate though clearly related issues.

You can have a small government with a large deficit (e.g. during WWII we had a smaller government but a very large deficit) and at least theoretically you can have a very large government with little or no deficit (though I think it is unlikely).

While the pattern is that a larger deficit accompanies a larger government it is not always the case.

Obama's stimulus and budget is more about expanding the scope and size of the government under the guise of a recession fighter. He and the Democrats were and are disingenuous about this issue, which is highlighted by the fact that most of the funds will be disbursed not this year but in later years.

These programs should have been debated separately and decided on their merits not as a bogus recession fighting stimulus.

PG said...

In what way will the government under Obama be "bigger" in the sense that the WWII government was "smaller"? Has Obama proposed to have a greater percentage of the U.S. population get their paycheck from the government than did during WWII?

Cycle Cyril said...

During WWII the government was "smaller" in two ways.

First the expansion of the government with regards to its wartime needs was clearly temporary in many areas, and second, the number of different areas in which the government imposed itself into the economy was limited.

For example healthcare. The government did not nationalized healthcare but maintained the prior structure of privately provided healthcare. (It did affect how it was paid for via the restrictions on how much companies can pay a worker directly but did not restrict benefits, which resulted in company sponsored health plans. This in later years would result in distortions of the marketplace since individuals could not deduct healthcare insurance costs, but that is another story.)

Obama is proposing a massive and permanent expansion of government not just in size but in scope. His proposals will, in time nationalize healthcare; he will in effect nationalize alternative energy sources since they are not economically viable and depend on subsidies; the banks and American auto industry is on the verge of nationalization; and that doesn't even include the people who will get an income subsidy from the government, which they did not get before, when their "taxes are cut" into the negative range.

PG said...

Obama is proposing a massive and permanent expansion of government not just in size but in scope. His proposals will, in time...

Call me when Obama actually says he's going to permanently nationalize health care, banking and the auto industry. Every plan to nationalize the banks has been discussed as being just as much of a temporary emergency measure as wartime government expansion (see, e.g., Japan's and Sweden's temporary nationalization of banks during an economic crisis and re-privatization once the crisis had passed). Subsidies =/= nationalization, unless you believe the child tax credit means the government also has nationalized baby-making.