Why traditional small-government conservatism is dead in the U.S.

“High Taxes, Big Spending, Low Unemployment: Tim Walz’s Economic Record” (Wall Street Journal, a purportedly conservative newspaper, August 2024):

[Walz] also pushed through a $2.6 billion infrastructure bill—the largest in state history—that will benefit residents and businesses.

This is a news article, not opinion. So the Wall Street Journal reports it as an established fact that taking $2.6 billion from individuals who would have invested it or spent it privately and giving it to government contractors “WILL benefit” residents. In other words, the WSJ is certain that the government will spend this money better than individuals would have. Therefore, a Reagan-style appeal to shrink government should be rejected by essentially all American voters (readers of Democrat-affiliated media, such as the NYT, certainly aren’t going to argue that limiting government spending is beneficial).

Separately, how will the $2.6 billion in Minnesota taxpayer funds be spent? A press release says that “Black, Brown, and Native communities” will benefit more than second-rate white people:

I think this is why sharp-penciled guys such as Paul Ryan have been sidelined or forced out of government and why Congress will never stop borrowing and spending (which also dooms us to at least moderate inflation, I think). If tax-and-spend is great then borrow-and-spend is at least good.

Readers: Are there any candidates running for election this week on your ballot who seriously advocate for a smaller government?

16 thoughts on “Why traditional small-government conservatism is dead in the U.S.

  1. Dr. Greenspun, how long can this trend continue for? At some point, the US dollar will stop being the reserve currency and fiscal discipline will be imposed at the cost of social harmony. We might end up with Leonel Shriver’s The Mandibles coming to life.

    • Anon: I’m not that worried about the U.S. dollar because most other countries seem to be even worse than we are at trying to cheat their way to prosperity or at least cheat their way to having an economy large enough to support their aspirations of government spending.

    • Anon: I also am generally skeptical of catastrophism. Americans are, I think, biased toward imagining Big Drama. But look at the UK where we came from. They’ve been quietly stagnating since World War II. They get poorer relative to the successful countries every year, but it is a steady gradual process. Maybe there will be some drama when the UK switches over to Islamic law.

  2. Small government conservatism never existed in the US or anywhere else. It was just a post hoc rationalization for opposing policies they didn’t like because they benefitted the out-group.

    • Fazal: If “Small government conservatism never existed in the US” how do you explain the tiny percentage of GDP consumed by the U.S. government for the first 150 years of the nation’s existence?

  3. The full paragraph at the WSJ reads:

    “His backers point to the 2023 passage of the nation’s highest state child tax credit, which reduced taxes for lower-income Minnesota families. He also pushed through a $2.6 billion infrastructure bill—the largest in state history—that will benefit residents and businesses.”

    So, arguably, the article is presenting the alleged “benefit” as something else “his backers point to”.

    But, admittedly, if that’s what the writer meant to say, he could have been clearer.

  4. I should add that the WSJ’s front page this morn had an article that really belonged back on the opinion pages: “America Faces a Third Referendum on Trump’s Dark Message” (free link: https://www.wsj.com/politics/elections/america-faces-a-third-referendum-on-trumps-dark-message-e6958b94?st=Y2EQD9&reflink=desktopwebshare_permalink)

    Yes, the D-side said the MSG rally proved that Trump and his supporters were Nazis, but (according to the article) it’s Trump who has the “dark message”.

  5. Small government was doing just fine, until, it gradually expanded and took over: healthcare, welfare, education, et. al.

    Show me an example, where a government project has a positive return on investment. Very much everything our a government has poked into, is a failure.

    • DT: I love the Interstate system’s original design, in which gasoline taxes would pay for construction and maintenance!

      George: I think that a lot of government projects have had positive ROI, e.g., the U.S. Mail system, even if the ROI would have been higher had a private company done the same function. My beloved Air Traffic Control system (privatized and unionized in Europe to produce a yet higher cost, I think: https://www.dailymail.co.uk/news/article-1244156/Spanish-air-traffic-controllers-earn-800-000–replaced-automatic-systems.html (controllers in Spain were earning $1 million/year in pre-Biden dollars))

      We could say that Internet (TCP/IP) was a government project and has had a positive ROI, but I think the better analysis would be to start with all military-funded research instead of picking the one tiny project that happened to yield big returns.

  6. Phil, your post here is similar to one I commented on in the past couple weeks in which you seemed puzzled why events were playing out in a way that is has been straightforwardly explained by many others. Here again, the outcome you have nicely outlined is exactly the outcome that would be expected given the circumstances. You seem highly knowledgeable about many subjects, so I’m again surprised you seem surprised about the outcome here. Have you ever studied economics and in particular game theory? This particular situation is perfectly understandable if you analyze it with a bit of relatively simple game theory.

    • This particular situation situation is absurd from the common sense economical perspective given multiple abysmal failures of so called socialist experiments. Witness Venezuela for a quick refresher.

      Academician Sakharov had this bizarre (as I thought at the time) “convergence theory”. Turns out he was right about the “convergence” although not in the way he hoped:

    • Ivan, I agree that it’s “absurd from the common sense” perspective, but it is nevertheless the expected outcome, even if it will surely make us all worse off as you correctly observe has happened in other socialist experiments. Take a look at the Prisoner’s Dilemma (wikipedia has a decent overview) and then apply the same sort of analysis to the situation here. The outcome there seems somewhat perplexing, but makes perfect sense when you consider the actors’ incentives and the constraints. And, same goes for the situation here.

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