Diuretic said:
Questions. Is it possible in advanced capitalist economies like the US or Canada or the UK or Europe not to have "big government"? Is it that reality will triumph over ideology and government will be exactly the size it needs to be?
Please don't let this deteriorate into another round of mindless liberal/socialist bashing by the von Mises adherents. I'm really looking for an answer. Mariner made an excellent post explaining the reality of managing a capitalist economy. It seems to me that government must be "big" enough to manage a capitalist economy because if government isn't "big" - ie influential, powerful - enough to do so then the economy itself will cease to exist as a structure identifiable with the nation that seeks to run it on behalf of its citizens. Perhaps the "small is beautiful" mantra is fine in a textbook but in a real economy with the supercharged power of an advanced capitalist economy a government that was too "small" would be wiped out.
How is an advanced capitalist economy going to "wipe out" our government?
To answer your question, yes, you can have an advanced capitalist economy without big government. History shows us that big socialist governments tend to correlate with stagnant living standards, and you still have inequality, even in the most hardline socialist governments.
Mariner said:
when you ask people here (as I have, several times) exactly what parts of "big" gov't they are willing to live without, they tend to come up blank. They seem to like the Coast Guard, National Parks, highways, federal research that synergistically benefits private industry, the Army, etc. etc. The only thing they'll keep coming back to is "welfare" and "entitlements." They forget that welfare barely exists in its traditional form anymore. And when it comes to entitlements, they're too decent truly to let sick people die in the streets. Take them case by case, and they have difficulty figuring out how to cut entitlements fairly.
I agree that "welfare", ie payments to the poor, are a relatively small portion of expenditures, and they would not be my #1 item to cut. The problems with welfare are not the money costs, but the human costs.
But, if you want a list, here's one for starters:
* Reduce the size of the military. We spend more than like...the next dozen or more countries combined. Bring our troops home, make huge cuts, focus on actual defense, and adopt a strictly swiss-like policy of neutrality. No more foreign aid either.
* Eliminate several departments entirely: Commerce (the dept. of corporate welfare), Education, Agriculture, Labor, HUD, and Energy just off the top of my head.
* Phase out social security, so that people can afford to retire.
* Eliminate medicare and medicaid, and severely curtail the FDA in order to cut medical costs. At the very most, they should be testing to see if drugs are safe (which they used to do, which was fairly easy), instead of safe
and effective, which delays life saving drugs and drives up medical costs.
* Pay off the national debt. If there was no debt, we could entirely eliminate income taxes. We cannot do this under a debt-based fiat currency like we have now though. If all debts were paid off, there would be no dollars in circulation.
* Auction off national parks and all the other vast federal land holdings. Use that to pay off SS obligations and the debt. Ditto for the interstate highway system.
* No more war on drugs. No more bloated budgets for the police state, no more overflowing government prisons.
