The Disappearing Federal Government: Bad News and Good News

Let’s start this post the way I ended the one before. Our population is getting older. Labor force participation is down. The average worker is getting poorer. The average adult is getting fatter and sicker. There are fewer intact families, and less family support. Jobs are very temporary, even among those who still have actual jobs. Unions have disappeared except in the public sector, where they have become another part of the ruling class getting richer as the expense of most workers. People are moving around the country, spending their childhood and getting their education in one state, their working and taxpaying years in one or more different states, and their retirement in yet another state. Leaving friends, family, church and community behind – often far behind. More people are dying early, and becoming disabled early. With a cradle to grave welfare system and an otherwise fractured and mobile society, a relationship with the federal government is becoming the only relationship most Americans will have from cradle to grave.

All these factors are likely to turn the federal government, more and more, into just an insurance company that also has an army, a government that is less and less able to accomplish much of anything else. Trying to change this long-term trend, given our economic, demographic and social conditions, would likely cause a social collapse with far more suffering and early death than is taking place already. There is lots of bad news about this, but perhaps a little good news as well. That good news has something to do with the views of Supreme Court Chief Justice John Roberts, and President Franklin Delano Roosevelt’s “Four Freedoms” speech.

Federal Expenditures: A Government Transformed

Just based on the news, it would be easy to believe that not much had changed for the federal government during the Obama Administration, other than Obamacare. After that program passed, barely, the Republicans took Congress, and there has been a stalemate – with shutdowns, possible defaults, and a sequester that was meant to force compromise by taking both sides hostage, but turned out to be the actual public policy.

Now that I’m looking at the data, however, I see things completely differently. Obamacare is nothing but a blip in the relentless increase of health care as a percent of the federal budget, mirroring its ongoing increase in the economy as a percent of GDP. The sequester actually did shrink federal spending in the limited areas to which it applied, something people don’t realize because the limited federal government operations people actually see have continued to stagger on the for the moment. Meanwhile, demographic and economic changes have completely re-shaped federal expenditures based on programs that were enacted before Obama and the Tea Party were even elected. Notably the increase in the share of the population that is age 65 or over, and the share of the workforce that is working poor rather than lower middle or middle class. The result is a government completely transformed in a way that is in once sense alarming, but in another sense hopeful.