The Great Society Redux
Pont, Pete Du, Chief Executive (U.S.)
ig government is not dead. It's not even sleeping. In fact, it may be ready to grow bigger than ever, aided, ironically, by fiscal conservatives whose primary concern is a balanced budget.
In just one week in January, for example, proposals were floated to expand still further the federal government's role in health care, child care, education, and housing. The same week also saw proposals for the federal government to train workers for computer industries and to increase the minimum wage.
If CEOs, board members, and senior executives of businesses aren't alarmed by this trend, they should be, because it portends an increase in alreadyintrusive government regulation of business. And in time it also portends an increase in taxes accompanied by the risk of decrease in economic growth.
The federal government has recently been taking 21.4 percent of the nation's gross domestic product in taxes-the highest percentage ever, more than even at the height of World War II. Add in state and local taxes and the figure climbs above 40 percent. But the federal deficit has been shrinking, and will possibly hit zero this year or soon thereafter-assuming that the Social Security surplus is included in the revenue. Predictably, the idea of a surplus has whetted the appetite of those who think government just can't do enough. Thus the call, for example, for an expansion of Medicare that even the White House acknowledges will have limited attraction for those it's supposed to cover, and will likely cost many times its estimated cost. And it puts the government's foot a little farther into the door towards nationalized health care.
That the traditional big spenders want to do this is not surprising. But it's disappointing to see that a lot of those members of Congress who came to Washington in 1995 ready to downsize government seem to be having second thoughts. With the budget nearly in balance, some of the deficit hawks are having a difficult time resisting increased spending.
So what's wrong with using a surplus, if there is one, to expand programs or start new ones? One fundamental reason is that people ought to be able to keep more of their money instead of having Washington-or a state capital, for that matter-spend it for them.
Political philosophy aside, however, there are sound economic reasons for reducing, rather than increasing, spending-no matter what the condition of the deficit. Gerald Scully, an economist at the University of Texas at Dallas who is also a senior fellow of the National Center for Policy Analysis, has found that the U. …