The Size of Government and the Choice This Fall

As we move into this election season, Americans are being asked to choose between candidates and political parties. But the true decision we will be making—now and in the years to come—is this: Do we still want our traditional American free enterprise system, or do we prefer a European-style social democracy? This is a choice between free markets and managed capitalism; between limited government and an ever-expanding state; between rewarding entrepreneurs and equalizing economic rewards.

We must decide. Or must we?

In response to what each of us has written in the preceding months, we have heard again and again that the choice we pose is too stark. New York Times columnist David Brooks (no relation) finds our approach too Manichaean, and the Schumpeter columnist in The Economist objected that, "You can have a big state with a well-functioning free market."

Data support the proposition that Americans like generous government programs and don't want to lose them. So while 70% of Americans told pollsters at the Pew Research Center in 2009 they agreed that "people are better off in a free market economy, even though there may be severe ups and downs from time to time," large majorities favor keeping our social insurance programs intact. This leads conventional thinkers to claim that a welfare state is what we truly want, regardless of whether or not we mouth platitudes about "freedom" and "entrepreneurship."

But these claims miss the point. What we must choose is our aspiration, not whether we want to zero out the state. Nobody wants to privatize the Army or take away Grandma's Social Security check. Even Friedrich Hayek in his famous book, "The Road to Serfdom," reminded us that the state has legitimate--and critical--functions, from rectifying market failures to securing some minimum standard of living.

However, finding the right level of government for Americans is simply impossible unless we decide which ideal we prefer: a free enterprise society with a solid but limited safety net, or a cradle-to-grave, redistributive welfare state. Most Americans believe in assisting those temporarily down on their luck and those who cannot help themselves, as well as a public-private system of pensions for a secure retirement. But a clear majority believes that income redistribution and government care should be the exception and not the rule.

This is made abundantly clear in surveys such as the one conducted by the Ayers-McHenry polling firm in 2009, which asked a large group of Americans, "Overall, would you prefer larger government with more services and higher taxes, or smaller government with fewer services and lower taxes?" To this question, 21% favored the former, while 69% preferred the latter.

Unfortunately, many political leaders from both parties in recent years have purposively obscured the fundamental choice we must make by focusing on individual spending issues and programs while ignoring the big picture of America's free enterprise culture. In this way, redistribution and statism always win out over limited government and private markets.

Why not lift the safety net a few rungs higher up the income ladder? Go ahead, slap a little tariff on some Chinese goods in the name of protecting a favored industry. More generous pensions for teachers? Hey, it's only a few million tax dollars--and think of the kids, after all.

Individually, these things might sound fine. Multiply them and add them all up, though, and you have a system that most Americans manifestly oppose--one that creates a crushing burden of debt and teaches our children and grandchildren that government is the solution to all our problems. Seventy percent of us want stronger free enterprise, but the other 30% keep moving us closer toward an unacceptably statist America--one acceptable government program at a time.

This process has led to a visceral type of dissatisfaction with the current direction of our country. The president's job approval has fallen almost linearly since he took office (standing today at 45%, according to Gallup; 41%, according to Rasmussen) despite the fact that his policies are precisely what he promised when he handily won the 2008 election. Rasmussen finds that only 29% believe we are headed in the right direction as a nation and two-thirds say they are angry about current policies of the federal government. Majorities believe that "big government" poses the greatest threat to our country, according to Gallup.

Millions of Americans instinctively look to our leaders for a defense of our culture of free enterprise. Instead, we get more and more publicly funded gewgaws and shiny government novelties to distract us. For example, the administration stills touts the success of programs such as "Cash for Clunkers" in handing out borrowed money to citizens while propping up a favored industry. Yet Rasmussen found 54% of Americans opposed the program (only 35% favored it). Plenty of people may have availed themselves of that notorious boondoggle, but a large majority understand we were basically just asking our children (who will have to pay the $3 billion back) to buy us new cars--and that's not right.

More and more Americans are catching on to the scam. Every day, more see that the road to serfdom in America does not involve a knock in the night or a jack-booted thug. It starts with smooth-talking politicians offering seemingly innocuous compromises, and an opportunistic leadership that chooses not to stand up for America's enduring principles of freedom and entrepreneurship.

As this reality dawns, and the implications become clear to millions of Americans, we believe we can see the brightest future in decades. But we must choose it.

Arthur C. Brooks is the president of AEI. Paul Ryan is a Republican congressman from Wisconsin.

Photo Credit: iStockphoto/Andyd

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