The wrong kind of small government

Published 11:10 pm Wednesday, November 4, 2015

Many fiscal conservatives want to limit government spending. Closer examination, however, reveals that often they pursue what I think of as “big government on the cheap” as opposed to principled, limited government. Cutting corners on important government services harms Americans and the cause of limited government.
Senator Barry Goldwater referred to Republican policies under President Eisenhower in the 1950s as “a dime store New Deal.” Big government on the cheap attempts to provide government services at a reduced price. Politicians promoting this type of “small” government hope that people won’t notice the dime store quality versions of services. Let’s consider some examples.
Medicaid allows politicians to take credit for providing poor and disabled Americans with medical insurance. But inadequate funding leads to low reimbursement rates for services and few participating doctors. Consequently Medicaid enrollees have difficulty obtaining medical care and remain in poor health. A University of Virginia study found that Medicaid patients had worse surgical outcomes, controlling for age and other risk factors than patients with private insurance, Medicare, or even the uninsured.
Lengthy delays for appointments and care at Veterans Administration (V.A.) medical centers provide another example. Politicians publicize the promise of care for veterans, but the quality of care ultimately depends on timely delivery of care. A lack of funding led to instances of veterans dying while waiting for screenings or treatment. Congressional hearings found deliberate falsification by the V.A. of reported wait times for appointments and treatment to help hide the consequences of government on the cheap.
Transportation and criminal justice offer further examples. Governments build the vast majority of our streets and highways. Insufficient capacity at rush hour results in congestion, which cost Americans $124 billion in 2014. Government has failed to expand road capacity as population and vehicle use have grown.
The U.S. Supreme Court established the right of indigent defendants to court appointed counsel in Gideon v. Wainright, and public defenders help maintain the legitimacy of our criminal justice system. Inadequate funding has long compromised this right, but more than forty states now charge defendants who use public defenders. In fact, the criminal justice system now imposes numerous fees, including the cost of prison. The threat of unpayable fees provides another means to induce defendants to accept a plea bargain.
I favor small government achieved by turning many government services over to the private or voluntary sectors. I believe that the services that we decide government should provide should be adequately funded. Big government’s attempts to appear to deliver more than we pay for entail economic and ethical costs.
Poor quality government services adversely affect our economy. The billions of hours Americans spend in traffic jams, for instance, cannot be used productively on the job (or spent with our families). Public school graduates unprepared to enter the workforce constitute lost economic opportunity.
The V.A. scandal illustrates the ethics of government on the cheap. Our military should only go into combat when the vital interests of our nation are at stake. And if vital national interests are at stake, surely our representatives in Washington should be able to adequately fund veterans’ care out of the trillions of our tax dollars they spend annually. Spending money to boost Congress’ reelection prospects while veterans die from treatable illnesses is disgraceful.
Proponents of big government on the cheap ultimately hurt the cause of limited government. Citizens equate small government with poor quality services, and view small government advocates as heartlessly denying people things like adequate health coverage. And big government on the cheap politicians take credit for providing many government services, and consequently have little interest in reducing the scope of government through privatization.
Abraham Lincoln set forth the guiding principle of limited government over 150 years ago: “The legitimate object of government is to do for a community of people whatever they need to have done, but can not do at all, or can not so well do for themselves – in their separate, and individual capacities.” Big government on the cheap provides the wrong kind of small government.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. Respond to him at and like the Johnson Center on Facebook.

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About Dan Sutter

I am the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.

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