Government is bigger than ever and controls more aspects of American life than at any time in U.S. history. Last year, the federal government ate $3.52 trillion out of a $13.2 trillion economy. With the current trajectory of big government under the Democrats, the federal bureaucracy will devour as much as 50 percent of this nation’s economic activity by midcentury. To illustrate how wasteful that is, take a look at the empty space above this editorial. That’s what government creates – nothing.
A basic problem with a future dominated by ever-expanding government is that bureaucracies are hobbled by waste, fraud and abuse. Government simply does not work well. Freedom works, but the more government that exists, the less freedom we have. Under President Obama and the Democratic Congress, the United States is heading in the wrong direction. The big spenders are on a joy ride, and we’re stuck in the back seat on the road to dramatically less freedom.
The main battleground of the war between freedom and government is the marketplace. Markets work for a simple reason: They give people choice. Consumers know what they want, and businesses try to figure out how to produce and deliver the goods and services the best way, considering price, quality and service. Only the best firms survive.
Today is the first anniversary of the start of Mr. Obama’s term in the Oval Office. For the past year, Americans have been told that government is smarter than private industry and that more government intervention is needed to fix problems in the market. Central to this agenda is the canard that private for-profit companies have to charge higher prices than nonprofits to recoup enough to earn profits, thus making for-profit firms less competitive. This explanation is wrongheaded because it ignores that profits give an incentive to lower costs and improve quality. The greater the incentive to reduce costs, the less waste there is. That is why, despite all the tax advantages given to nonprofits, the economy is dominated by for-profit firms.
Politicians and bureaucrats in Washington don’t know what individual consumers want and certainly shouldn’t be the ones to decide what individuals need. If the government decides everything, elections will determine what businesses can produce and what options consumers will have. In a healthy market system, consumers wouldn’t have to persuade their neighbors to use the ballot box to determine what type of toys, computers, books, houses or cars they can buy. Those products will be produced as long as the value consumers get is greater than the costs of producing them. The government should stay out of the way of these inherently private everyday decisions.
A common justification for government intervention is based on the notion that individuals and firms don’t bear the full costs and benefits of their actions and that taxes and regulations are needed to correct the imbalance.