Monday, March 9, 2009

A (Very) Brief History of Big Government

In this country, I truly believe that most all politicians seek office with the best of intentions. These people feel that they are doing what is best for the country with their spending, pork-barrel projects, etc. This concept of big government spending is called Keynesian economics. Based on these theories, if the government expands its size from the bottom up, (ie. from the demand side of the spectrum), that the top side (the suppliers) will follow suit. This is the real soul of big government. The 'lets do it for the little guy' spirit.
I hope not to be to much of a preacher here, but this is, however, a failed system, as history has shown. FDR didn't pull us out of the depression with big government, even though this is how many public schools teach it to be. No, his 'New Deal' economics only put a band-aid solution to a big problem, and when the spending pulled back, as all spending must at some point, the bottom fell out. It was WWII that pushed this economy out of depression. Then came Lyndon B. Johnson's 'Great Society'. This was mostly New Deal part II, and thought of by Kennedy anyway. Shortly after spending was cut back, which it always has to be, economic problems surfaced again.
This is where history is getting to be repeating. Jimmy Carter came into office with the mantle of 'Change'. Sound familiar? His administration drove unemployment to astronomical heights (upwards of 20%, though the exact number escapes me), and created huge inflation with spending. What stopped Carter's dreaded stagflation (stagnant economy, high unemployment and high inflation)? Conservatism.
Supply-side economics pushed by Reagan changed the country. Cut capital gains taxes down so that businesses have the means to expand. This brings more jobs to the economy. Cut taxes across the board for poor and rich alike, so that people have money to spend to live their lives how they want to. Keep government out of the way of people's freedoms! This economic time brought the largest peace-time expansion of the economy this country has ever seen; and it all came through controlling government's size and spending -- not expanding government size and spending.
So here we are today, with a President trying the failed systems of the past, all under the guise of change. Is this really change we can believe in? I see it as lessons we should have learned years ago.

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