More Words we need to understand - Government Expansion

Editors Note: Two Clubs is back with another essay detailing government expansion. Once again another insightful well written piece.

More words we need to understand… This post is another in a series about pervasive content in the zeitgeist and terms we need to understand. The topic of today’s post is Expansion of Government.

There is a very common talking point prevalent in all conservative discussions about government. That is, the size of the institution and how obtrusive it is in our lives. The familiar meme is to discuss how Democrats, or more importantly, liberals, have greatly contributed to the expansion of government, increased the amount of tax dollars required to support the beast and infringed upon our rights as Americans from oppressive taxation. The narrative has been repeated for decades and has stuck in the public consciousness. The average American firmly believes that Democrats are responsible for the vast majority of government expansion and spending. This article will examine the facts behind these claims and try to distill some truth to the meme.

It doesn’t take an economist or a rocket scientist to pigeonhole government expansion. A simple look at the budget will tell us where our money is being spent. If we look at each of the major line items, and see when and who created these departments, we should begin to see how the expansion of government took place and under whose watch.

The 2010 budget called for discretionary spending to the tune of $1.378 trillion dollars. That is up 13.8% from 2009. There are talking heads in the media that will claim this to be proof of the expansion of government, but this is just the cost of doing business with the institutions passed from administration to administration. While the dollars spent are important, it is actually the portfolios themselves which give us the markers of government expansion.

The number one line item on the discretionary spending list is the Department of Defense. This is a complex and nuanced portfolio to examine so will be discussed last. The next line item is the Department of Health and Human Services ($78.7B). This portfolio was created under the Harding administration. I don’t think that anyone will argue that this is a much needed portfolio and that the intent was positive. This contributed to the growth of our nation and the rights of many citizens. It allowed for many programs that protected the nation poverty and disease. For this discussion it is important to note that the portfolio was created by a Republican administration. It should also be noted that the Department of Education ($46.7B) was a component of this portfolio, but was spun out into its own portfolio by the Democratic Clinton Administration so it would become more nimble and reactive. This was not an expansion, but an attempt to make government more responsive in a key aspect of maintaining American market superiority.

The number three line item is the Department of Transportation ($72.5B). This portfolio was created under the Johnson administration and was an effort to manage the flow of people and products in and around our nation. This folio leveraged the incredible infrastructure the Eisenhower administration left behind with the implementation of the interstate hi-way network and assumed responsibilities of maintenance and expansion of the system. This “expansion of government”, another greatly needed portfolio, was created by a Democratic administration.

The Department of Veteran Affairs ($52.5B) is next on the hit parade. Established under the Hoover administration this portfolio assumed all responsibilities for managing those special needs of those who served in the defense of our nation. Not much needs to be said about a portfolio created to look after those who would elect to protect those who cannot protect themselves. The Republicans did the right thing when this department was created.

The next line item is the State Department ($51.7B), a portfolio which has been around since the adoption of the constitution. For this conversation, focusing on the expansion of government, this department gets a pass, unless someone wants to take a run at Washington, Jefferson, Madison, et al.

The Department of Housing and Urban Development ($47.5B) is the next portfolio on the budget. Created by the Johnson administration during the Civil Rights movement this was a department focused on the poor and disenfranchised in the nation and helping them find acceptable housing and living conditions. The other side of this cabinet coin is the urban renewal projects it encourages, limiting sprawl and inner city decay. Another valuable portfolio founded by a Democratic administration.

Six of the next seven line items were created by Republican administrations. The Department of Homeland Security ($42.7B) was created under the Bush (43) administration, the Department of Agriculture ($26B) was created under the Lincoln administration, the Department of Justice ($23.9B) was created under the Grant administration, the National Aeronautics and Space Administration ($18.7B) was established under the Eisenhower administration, the Department of Commerce ($13.8B) was founded under the Teddy Roosevelt administration and the Department of Labor ($13.3B) was created under the Taft administration. The only exception to the Republican domination in this regard is the Department of Energy ($26.3B), created under the Carter administration.

One of the greatest ironies in the expansion of government, and the endless harping about government interference in business, is the Environmental Protection Agency ($10.5B), established under the Republican Nixon administration. This is the last of the $10 billion plus portfolios and give us a good idea of the size of government and who was responsible for the expansion.

The last portfolio to discuss is actually the first mentioned, and most complex to understand, the Department of Defense. It is not common to consider defense spending expansion of government, but this is a government body identified in the constitution and paid for through direct taxation. Any increase in spending in this regard is then a direct expansion of government.

The Department of Defense was established under the Democratic Truman administration immediately after WWII. This unification of the armed forces under the Joint Chiefs was as much budgetary as it was strategic. The creation of this new portfolio is just scratching the surface of government expansion and who was responsible. The inflationary numbers under certain administrations tells the full story.

The real spending sprees began with Vietnam. Under the Johnson (D) administration the military spending ranged from $333.1B - $449.3B for a total of $1,550.6B during his term. The first Nixon (R) term saw a minor overall increase in spending to $1,558.8B, but a rapid decrease in spending from year-to-year, dropping from $438.1B - $283.8B. In the second Nixon term we saw the last great reduction in spending under a Republican president, where the military spending shrank 23.7% down to $1,190.1B over four years. The Carter (D) administration reduced the military budget by another 3.2%, down to $1,152.1B over his four year term.

The Reagan terms in office were a return to vast expansion of the military and size of government. During Reagan’s first term the military expanded greatly with direct spending returning to near Vietnam levels. Spending increased by 21.97% and totaled $1,405.2B in Reagan’s first term. In his second term the Republican president increased spending another 20.88% to a record $1,689.3B. The expenditures and size of the military were never larger and would only be surpassed by another Republican president, a decade and a half later.

Under the first Bush president spending was reduced by a modest 6.7%, but still maintaining spending levels above that of the war time Vietnam era. The $1,575B in spending maintained much of the expansion the Reagan years has forced upon the nation. The Clinton administration saw spending continue to shrink. During his first term Clinton decrease the size of the military and spending by 15.8%, reducing total spending to $1,326.2B. Clinton further decreased spending by 8.7% to a total of $1,212.1B. The budget, and size of government, was becoming smaller and easier to manage. Then came W.

George W. Bush was the spending champion. During his first term in office military spending expanded from $307.8B to $494.4B, or $1,497B for an increase of 23.53%. Bush was even more reckless in his second term, increasing spending another 37.1%, to an incredible $2,053B. This is just his spending on the military and does not include the contracts made under other agencies for services in Iraq and Afghanistan. Considering there was almost a 1:1 ratio of contractors to military personnel in Iraq by the end of the Bush administration you get the sense that the numbers are much higher than captured in a budget report. When you add into the mix the tax cuts, which are in effect nothing more but deferred spending, a disturbing trend emerges.

The massive expansion of government has actually taken place under Republican administrations. Of the 16 departments with a budget over $10B (not including the DoD), only three were created by Democratic administrations, and one (Transportation) was a direct fallout of a Republican program (the interstate system) and another (Education) was split off for efficiency purposes. The greatest expansion of government has taken place in the military-industrial complex, with the greatest expansion taking place under Reagan and Bush 43. Democrats have been largely responsible for the reduction in government spending, or at worst, shifting of spending to much needed domestic programs.

A lot can be said about the complexity of government and what it provides for the American people. If you bother to take a look at this “expansion” you can see it was mostly done for the right reasons, regardless of who did it. All of the departments were developed to look after the common good, to provide for the weakest, knowing that by doing so would make our country stronger. The overall management of the system maybe a failure, and require some retooling, but overall the portfolios make sense. Where we get into problems is the philosophy of how the system should work. Where we fail is how the bill gets paid.

The Republican philosophy is to borrow to pay for programs. The Democrat philosophy is to tax to pay for programs. The Democrats tax and then spend, in a balanced budget approach. This has given the Republicans much ammunition to develop narratives about the Democrats and liberals. While there is some truth in the meme they have developed, the narrative about expansion of government is highly inaccurate.

As this exercise has shown the expansion of government took place on the Republican watch, with much of the negative aspects as a result of military spending. It is ironic that an out-going Republican President (Eisenhower) would warn us of the quickly expanding military-industrial complex and the potential harm it could do to our country, yet his own party would ignore his prescient comments. Instead of acknowledging their role in the expansion of government the Republicans have instead chosen to obfuscate and develop narratives about how “tax and spend Democrats” have got us in this fiscal mess. I only hope that one day the Democrats will find some spine and mount a counter attack, identifying the Republicans as the true source of government expansion and label them accordingly, as the “credit card conservatives” they have turned out to be.