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How big should government be?

Updated on July 15, 2011

Where does the U.S. stand with respect to other nations

How big is our government?

I have often heard that our government should be smaller. This leads me to a number of questions. How do you measure the size of government? How big is our government? What is the right size for a government to be?

Neither having no government, nor all of a country's economic activities being subsumed by government sound like particularly good ideas to me. The places with no government, say Somalia or Afghanistan, don't seem like they provide nice conditions to live under. I like the idea that there are police to defend me if someone bullies me, steals my things, or does worse to me. Given the state of the world, it seems like having a military to defend the sovereignty of our country also seems like a good idea. So, no government is ridiculous. Countries that have tried to make all activity subservient to the government also seem not to be paradise on earth. I traveled to the Soviet Union, when it still was the Soviet Union. It looked pretty drab to me, and its citizens looked pretty dour. The joke members of our tour group told was: "What do you call someone who smiles in the Soviet Union? A: a tourist."

The only reasonable way I can think to measure the size of government is to consider the portion of GDP that is spent on government versus other activities. I serendipitously discovered a Web site that had already compiled this information for almost every nation on earth. The graph to the upper right is derived from the data on that site.

My impressions: The countries at the extreme ends of the graph are hell holes. There are places that I wouldn't mind living that spend more than we do on government, and there are nice places that spend less. The real problem we seem to have is that while our spending is in the upper two thirds of the chart, our revenues are in the lower two thirds of the chart.

Personally, the argument that government is too big and needs to be smaller, seems to be putting the cart before the horse. Shouldn't we first figure out what services we absolutely want our government to provide, and what we are willing to pay? That is the way I manage my own household budget. The argument that under no circumstances should we raise taxes seems very rigid and potentially disastrous to me. In my own life, if I want to maintain a certain lifestyle, I have to find a way to pay for it.

Another thing that caught my attention is that the vast majority of governments spend more than their revenue. It is probably human nature to want one's government to provide a bit more than what you pay for. I think that is ok, as long as, the excess is sustainable, either because it is small, the economy is growing sufficiently to pay for the debt in the future, or there is another source of income for the government, such as, oil for Middle Eastern countries. Given that, talk that we need an absolutely balanced budget sounds a little hysterical to me, but, then again, we are pretty far away from a balanced budget.

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    • oldhorse profile imageAUTHOR

      oldhorse 

      7 years ago

      American Romance, do you consider public roads or public eduction helpful to the protection of your rights, or pursuit of happiness? How about regulations that prevent a corporation from poisoning the water you drink?

    • American Romance profile image

      American Romance 

      7 years ago from America

      Simple, big enough to protect my freedom and unalienable rights, along with the persuit of happiness, nothing more!

    • junko profile image

      junko 

      7 years ago

      Oldhorse' You demostrated the genious of common sense.More American should question the sense of what is being said. vote up&useful.

    • CHRIS57 profile image

      CHRIS57 

      7 years ago from Northern Germany

      Good points in your hub. There should be an indicator for the effectivity of administrations.

      That figure can´t be the tax/GDP or spending/GDP percentages. Those numbers only show deficits/surplusses and good/bad housekeeping. They do not show how effectively taxes are used to control and activate policies and economy. If taxes are only used to pay the servants of administration then that i would call 0% effectivity. If all collected money was immediately redirected and spent on programs to push government objectives, then this would be 100% effective.

      Neither is possible and the question is how much money evaporates by paying the government apparatus before money ends up in real economic activities (in that sense even spending on military is productive activity).

      A figure that would give a hint is the percentage of government employees in relation to total workforce. Does anyone have statistics?

    • profile image

      Howard Schneider 

      7 years ago from Parsippany, New Jersey

      Excellent analysis OldHorse. Too many people go on ranting about perceived problems without examining the reality of the situation. I wish more people would do that. We hear cut, cut, cut right now but I do not believe they actually know what the results will mean for our country.

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