The Government is here to help…or is it?

Over the course of the past twenty years, there has been a significant shift in our relationship with government. In part, this is the result of exogenous factors: the financial meltdown, the bursting of the housing bubble, and more recently the COVID pandemic. Arguably, all these crises have necessitated (or at least implied) government intervention to mitigate negative consequences.

Actually, this is just an acceleration of a trend that has been picking up steam for decades. The hue and cry for the Federal Government to wholly alleviate the consequences of local natural disasters is illustrative. Effectively, we now turn to FEMA to not just lessen the impact or assist in humanitarian challenges; we now expect the government to “fix” the problem. This entails resolving immediate consequences as well as shouldering the burden to alleviate future incidences regardless of the proximate circumstances.

This is a dramatic turn of philosophy. In his 1981 Inaugural Address Ronald Regan stated, “Government is not the solution to our problem, government is the problem.” He swept in on a wave, a core belief that government intervention could not fix many of the nation’s problems. Even Democrats took up this banner. In his 1996 State of the Union Address Bill Clinton said, “the era of big government is over,” (although he also acknowledged a significant role for the Federal bureaucracy).

In a 1985 speech, Regan quipped, “The nine most terrifying words in the English language are, I’m from the Government and I’m here to help.” What is our response to that statement today?

Particularly for the younger generations I would posit that the general consensus would be, “Not true!”  Government is not only benign, but it also has the answers to most of our troubles. Moreover, it has the resources (printing money without backing) to make it so. Many now believe that free- market capitalism no longer provides (equitable) mechanism to propel our society forward. Consolidated power and socialism are the answer.

A massive change has occurred over the past quarter century. There is now little support for the restraint of government spending or bureaucratic expansion.

It fundamentally started with the second-Bush Administration’s response to 9/11. The Patriot Act was an extraordinary intrusion into the lives of our own citizens (even within our own borders). The response to the Great Recession was likewise unprecedented: bailout of “too big to fail” financial institutions and nationalization of some segments of our economy. The trend picked up steam under Obama. Continuation of bailouts and Obamacare are exemplar.

Some might argue that Trump reversed the course. He did not. In fact, the deficit increased during his four-year term almost as much as Obama did in eight. The Biden Administration has added a further $3.1 Trillion in deficit spending in less than one year. However, one must acknowledge that much of that was (at least tangentially) related to the Pandemic.

In a stark reversal of the prevailing mood of the 1980s, our new President has effectively stated that deficit spending no longer matters. “By acting now, even with deficit spending, we can add to growth in the near future.” We used to decry massive deficits as foisting the burden off on our children. Apparently now we are helping them out!

Beyond the irresponsible deficit spending and the past intrusion of government policies is the notion that government is supplanting individual responsibility and personal charity. Government must now eliminate the risks of everyday life through ever-increasing regulation. In addition, many citizens now feel that because the government takes our money and spends it on social issues, our own benevolence is less significant. After all, “I’m already paying for it through my taxes.” This is a morally degrading situation.

“The government is here to help.” Some enthusiastically embrace that view. I do not.

Our societal structures, freedoms and economic well-being are under assault from all sides (Left and Right). The Democrats and the Republicans only differ in how and what they will encroach upon, not whether it should be done.

Where does it stop? The realist in me says, “I don’t think it does!”

All this folly works…right up until it doesn’t. And, when it doesn’t, it, will tip over rapidly (perhaps catastrophically). Even then and given our current state of mind, the response to disaster will likely be to demand even more intervention by the government not less which will simply compound the problem.