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| From ourworldindata.org |
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| U.S. federal debt as percentage of GDP; from wikipedia |
Now, I'm not going to say that GDP equates to better living, but it does contribute to higher living standards which, other things being equal, makes for greater opportunities for better living (more leisure time to study/think about philosophy, for example, or improved pharmaceutical technology under 'better living through chemistry' assumptions, for another). But let's say we look at this from the standpoint of purely economic outcomes (i.e., GDP per capita, perhaps adjusted for levels of inequality assuming that's particularly important to do...). And look at the two graphs above in combination, covering roughly the same period of United States history. Assume standard data/knowledge that any informed citizen should know about, concerning the size of government in the USA (spending, regulatory burden) both before and after the mid-20th century. (The first graph, GDP per capita, is on a logarithmic scale so that we don't get the J-curve effect from exponential growth, i.e., would show a straight line over time for a constant rate of growth.)
Do the graphs show that big government has produced better economic outcomes, without undue or deadweight cost?
I mean, I might understand how the debt incurred by World War II may have been necessary, and relative to the economy was being paid down in the subsequent decades, but since that time the welfare state has ballooned. Non-military spending since the beginning of the Great Society programs in the 1960s has increased from roughly 19 percent to roughly 28 percent of GDP. What are the benefits that have come about from these additional costs? From the GDP-per-capita graph, it appears hardly any benefit has happened compared to what came before. Meanwhile, the national debt relative to GDP has increased considerably and is projected to go yet higher. (I can only assume, based on my inquiries over the years into this matter, that this is due to the actuarial deficits in the Social Security and Medicare "trust funds" that those in the know have heard and talked about - the figures running in the tens of trillions of dollars (present value terms) if not over $100 trillion - are beginning to materialize; turning Keynes on his head, as it were, the long run is now arriving.
What the data show, to me, is that Big Government has brought the USA a large cost, without an added economic benefit. Am I missing something crucial here? Is it that economic growth rates tend to slow as economies mature, and that Big Government and its associated deficits/debt have kept the growth rate roughly the same, and that perhaps the added costs of Big Government are worth this? Is there a particularly compelling reason to believe this? Is it that per capita GDP could manage to keep up its growth rate under the strains of Big Government (greater government spending and regulation as a share of GDP) only if the federal government went into structurally higher levels of debt (as a share of GDP)? How do we tell? And how does the dynamic of accelerated globalization in the past half-century affect this analysis?
Is the American layperson in a good epistemic position to decide whether trading off liberty for Big Government (and you'd have to bastardize the meaning of "liberty" to think it's anything other than this) is worth both the economic outcomes as well as the effects on the national ethos and character? Do the decline and fall of empires throughout history have anything to warn us about here? Better get that philosophical education going, or risk an intensified shitshow, huh?
