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Reordering national priorities v. reviving big government

By W. James Antle III
web posted February 4, 2002

George W. BushWhatever you think of the wisdom of President Bush's decision to name North Korea, Iran and Iraq as "an axis of evil," his first State of the Union address was a refreshing change from Bill Clinton's laundry list of domestic expenditures and expansions of federal power. Cato Institute executive vice president David Boaz opined, "It's a pleasure to watch a State of the Union address largely devoted to carrying out the federal government's proper function of providing national defense."

Many observers felt that September 11 would lead to a revival of big government, as there was renewed confidence in authority figures, a spirit of community that seemed to contrast with libertarian individualism and a sense of emergency that tends to swell the state. But perhaps what we will see instead is a reordering of national priorities as the federal government focuses anew on its constitutionally mandated functions, such as providing for the common defense, and turns away from massive schemes aimed at income redistribution. The government entities most responsible for responding to the age of terrorism - police, military, intelligence, fire protection - are those charged with the protection of lives and property against aggressors, the very functions of government conservatives and most libertarians have always regarded as valid.

George W. Bush is no libertarian conservative, but his budget priorities in the aftermath of September 11 are more in line with the Constitution than could have previously been imagined. His new budget proposes a doubling of homeland security spending and a $379 billion defense budget while limiting the growth of most non-defense discretionary spending to just 2 percent. Some domestic functions of the federal government will actually be trimmed once adjusted for inflation.

Considering the post-Cold War trend to gut defense spending and shift taxpayer dollars to the welfare state, this is a dramatic change in government spending patterns. It is also one more consistent with the legitimate functions of government.

In an op-ed piece for The Washington Post, Office of Management and Budget director Mitch Daniels argued that it is appropriate for a war budget to cut domestic spending in order to properly prioritize military expenditures. Daniels noted that during World War II, non-military spending was cut by 20 percent and among the casualties were some of President Franklin D. Roosevelt's best-known New Deal programs, the Civilian Conservation Corps, the National Youth Administration and the Work Projects Administration. At the outset of the Korean War under President Harry Truman, non-military spending was cut by 28 percent in a single year.

Neither FDR nor Truman are remembered as fiscal conservatives, much less constitutionalists, but in times of war it is necessary to refocus on what it is truly essential for government to do. Daniels also refers briefly to the economic and fiscal consequences of failing to constrain domestic spending during the Vietnam War. Stagflation was the legacy of fighting the War on Poverty and the war in Vietnam simultaneously.

The challenge conservatives face is to inform the public that the priorities of the welfare state are incompatible with the present times. Dollars devoted to ineffective government programs, corporate welfare or pork barrel projects detract from those that can be spent defending this country from those who wish to kill Americans in large numbers. Maintaining the security of this nation in an unsafe and uncertain world is a difficult challenge that requires a substantial investment.

Yet this investment can only be afforded by a productive economy that generates the wealth necessary to produce both guns and butter. It has been noted that defense spending never exceeded 6.5 percent of GDP during the Reagan defense buildup that expedited the end of the Cold War, compared to the more than 9 percent military expenditures absorbed in the 1950s. Lower marginal income tax rates allowed the free market to work and the result was prosperity that helped pay for rebuilding the American military even as living standards climbed.

Big government redistributing income will exert a drag on the productive sector of the economy, impeding job creation, business expansion and new investment. Without this growth of the private sector, the government cannot raise the revenues necessary to finance a war on terrorism without resorting to punitive and economically self-defeating taxation. Refer again to the income tax surcharge President Lyndon Johnson signed into law to finance the concomitant growth of the "Great Society" welfare state and the Vietnam-era defense budget, ultimately strangling the boom that followed the Kennedy tax cuts. Limited government not only is the best guarantor of individual liberty, it is ultimately in the interest of the greatest number of Americans.

Although Americans now live in times that powerfully demonstrate the proper priorities of government, we are by no means yet on a path to limited (much less smaller) government. Even as his administration touts restraint in domestic spending to keep the budget in control while defense spending escalates, Bush still supports adding a prescription drug benefit to Medicare, a significant expansion of non-means-tested entitlement spending. His proposals to fight the recession, while predominately composed of tax cuts, contain some spending increases and compromises with Democrats in Congress are likely to yield still more. This is all the more substantial in the context of a federal budget in excess of $2 trillion.

There is also a greater risk to limited government inherent in the administration's present course. While government properly exists to protect the lives and property of citizens, this does not mean that perpetual war is compatible with limited government. Wartime budgets may force the government to spend taxpayer dollars on defense rather than various improper and unworthy domestic projects, but war does not ultimately shrink government. In the long run, it grows government. Nor does war enhance individual freedom or civil liberties.

War is sometimes necessary. Faced with the terrorist menace that today stalks the civilized world, the Bush administration's military actions have been the only feasible option. But it is important to guard against a war on terrorism that becomes so amorphous it resembles the type of interventionism Murray Rothbard described in his essay "Invade the World."

Fighting terrorism need not usher in the largest government ever known to man. It can and should bring about a realignment of government priorities that rededicates civil authority to its central purpose of protecting individual rights at the expense of those functions that have the potential to violate them.

W. James Antle III is a senior writer for Enter Stage Right and can be reached at wjantle@enterstageright.com.

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