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Home | Mises Library | Bush Swells the State

Bush Swells the State

  • US_Congress.jpg

Tags Big GovernmentTaxes and SpendingWar and Foreign Policy

04/17/2002Jeffrey A. Tucker

As the war on terror drags on and on, saecula saeculorum, many people calling themselves libertarians have decided that it’s not such a bad thing after all.
(The pundits calling themselves conservatives were among the first enlistees, and the left, as might be expected, is all for it too.) 

What, some libertarians ask, is the point of government if not to bomb those who would threaten our safety? The trouble is that real life works a little differently from the civics-text ideal of government. Government uses war--and sometimes foments it--in order to expand its power over its own people and/or to expand its imperial reach, even as it prohibits private-sector efforts that might actually bring about more security (in this case, armed pilots).

"Of all the enemies to public liberty, war is, perhaps, the most to be dreaded," wrote James Madison, "because it comprises and develops the germ of every other." "No nation could preserve its freedom in the midst of continual warfare," he said. This is why, wrote John Quincy Adams, that "America goes not abroad in search of monsters to destroy."

That’s also why the founders tried to make it very difficult for the U.S. government to go to war, giving the president no autonomous power to do so--restrictions routinely ignored today. On the ideological level, the founders warned constantly against entangling alliances and urged only commercial ties with the world. Peace and free trade: a public-policy combination all but absent in current debate. 

But enough of theory and history. Look at the current reality. Bin Laden is still at large, and airlines are still prohibited from securing their property from hijack threats, but big government is growing at rates not seen since Lyndon Johnson’s time. 

The Bush administration is engaged in an incredibly dangerous spending spree, beyond that which the Republicans would ever tolerate if undertaken by a Democrat. If it took a Nixon to go to China, it takes a Bush to manufacture annual double-digit wealth transfers from the private to public sector, much of which is being spent on foreign aid, domestic surveillance, public-private partnerships, and the construction of ever more weapons of mass destruction--all of which are being paid for through debt and inflation and creating a Keynesian-style “recovery.” 

From October 2001 to March 2002, federal outlays were up by $60 billion over the same period the previous year. In this time period, the federal government, the one we all learned to love so much, has somehow managed to burn through fully $1 trillion in wealth formerly owned by the private sector. As for revenue, it is down from last year by $44 billion, netting a deficit of $129 billion. All told, annual government spending is growing right now at an astonishing 8 percent rate. (All this data comes from the latest reports from the Congressional Budget Office.)

Taking a broader look, spending on government programs from 1999 to 2003 will have increased 22 percent (in inflation adjusted dollars), according to a new analysis by the Washington Post. Measured against the GDP, total federal spending will soar to 18.5 percent in these three years. Spending rose 9 percent in the last two years of the Clinton presidency but will rise 15 percent in the first two years of the Bush administration. If Clinton was a social democrat in love with big government, what does that make Bush

In fact, President Bush’s budget proposals call for spending increases that make ClintonReaganCarter, Ford, and Nixon look like fiscal conservatives. Not since Johnson launched his combination of the Great Society and the Vietnam War has federal spending been going up at this rate. The explosive increases not only cover defense spending but also affect the entire apparatus of the domestic welfare state, from education to unemployment payments to Medicare. The welfare and warfare states serve different constituents but political logrolling and intricate games of quid pro quo insure that both groups can enjoy the loot.

This spending is only the beginning. These figures do not include proposed spending increases after 2003, which dwarf any proposals made before last year. During the stimulus debate, no Democrat dared suggest spending near this level. If Bush had been elected on the Socialist Party ticket, this is just about the kind of behavior we would expect (and yet the socialists would have been squeamish) . 

Among the most odious of single ticket items is the $500 million that the Bush administration is planning to spend on rebuilding the destruction wrought by expensive U.S. bombs on Afghanistan (millions of which have already been wasted). This destroy-and-build spending has become a regular feature of U.S. foreign policy since the Marshall Plan, when business connected to government discovered that the postwar cleanup can be a fast-track to doing good and doing well. And yet the new president of Afghanistan is weirdly complaining that it is not enough, that a failure to give more could revive terrorism emanating from his country, which makes one wonder if this is a promise or a threat. 

Inevitably, of course, Congress sees the main chance here and plans to not only give Bush what he wants but add to it with the usual litany of domestic baloney designed to channel tax dollars to the biggest campaign donors. Bush is preparing to rally his party supporters by denouncing Congress’s bigger spending plans as an unwarranted increase in big government. Meanwhile, revenue is down and Bush is calling for tax cuts, which means more pressure on the Fed to fund this spending through inflation. And no effort whatsoever is being made to demonstrate that any of this spending is actually necessary (the US is already in an arms race against itself) or will actually accomplish what it is supposed to accomplish. And no means are in place to reverse course, much less refund the money, once the spending spree proves fruitless for public purposes. The main mode of government is to take as much as it can get away with, and spend as much as possible. In the US, the government has been effective in citing military needs as a justification: 

Selected CountriesMilitary Budget
United States$396,000,000,000
Russia    60,000,000,000
China    42,000,000,000
Japan     40,400,000,000
United Kingdom     34,000,000,000
Saudi Arabia     27,200,000,000
France     25,300,000,000
Germany     21,000,000,000
Brazil    17,900,000,000
India     15,600,000,000
Italy     15,500,000,000
South Korea     11,800,000,000
Iran       9,000,000,000
Israel       9,000,000,000
Taiwan       8,200,000,000

The spending side of the equation understates the problem because it doesn't reflect the increased power of government law-enforcement agencies. The threat to civil liberties is growing by the day. The war has been used to justify egregious forms of new protectionism on steel and lumber, adding to already existing trade barriers that are raising prices on the American consumer. All the old problems of regulation and social engineering have been tabled or even made worse for the duration of the war.

We have new agencies in place promising to do what the old agencies did not and could not do. Will normalcy return after the war is over (if it ever ends)? Not if the partisans of power get their way. As Mises wrote in 1919: “From the beginning the intention prevailed in all socialist groups of dropping none of the measures adopted during the war after the war but rather of advancing on the way toward the completion of socalism.”

Back in October, Jonah Goldberg wrote: “The libertarians are right when they say that war fuels big government. But it doesn't have to be that way.” Whether it has to be or not, the fact is that it is happening, and neither Goldberg nor any of his compatriots seem to care. They find wartime too exhilarating to bother much with concerns about freedom, constitutional government, and other philosophical matters that kept them up late in college. 

This is hardly the first time that a war has fueled the growth of Leviathan. Clinton never had it better than when he was fighting some far-flung war somewhere. The same goes for all his predecessors. Government rides high during war, and the costs are rarely spoken of at all, especially not from the Republicans whose one-time devotion to small government has mutated into a promiscuous love affair with the welfare-warfare state. 

Now, in all the commentary on this amazing budget debacle, people speak as if the decision to spend 10 or 20 percent more this year than last is purely a matter of governmental discretion, as if the only limit to government expansion should be the good will of the political class. There was a time when this was not the case. The Constitution once restricted power. The federal government couldn’t tax individuals directly. It couldn’t inflate the dollar because we were on a gold standard. There was no central bank that could print whatever the government wanted to spend. 

What restricts government power today? For the most part, it is public opinion. That’s where libertarians and conservatives can play an important role in drawing attention to the lies of government, the dangers to liberty that war brings with it, and the real aims of the political class. Not to do that, and to instead celebrate the largest expansion of government in the lifetimes of anyone under 36, is to betray a kind of public trust. It is to discredit every slogan about “limited government” that has been advertised by pressure groups for decades. It’s one thing for the Republicans in office to do that. But why should intellectuals go along? 

The meltdown of liberty can be stopped. But it won’t be stopped until those who understand the problem speak out courageously against the clear and present danger, the state at war. It is a danger even if the state wins. As Mises says: “no citizen of a liberal and democratic nation profits from a victorious war.”


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