Size does matter

As Barack Obama ramps up the biggest increase in government spending in American history, Americans may be well advised to acquaint themselves with data created by the Organization for Economic Co-operation and Development (OECD), which show that countries with smaller, less intrusive governments enjoy greater overall prosperity than those with larger and more interventionist governments. The measuring stick the OECD used in determining which governments were bigger was what portion of a nation’s Gross Domestic Product (GDP) was utilized by that nation’s government at all levels.

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During the 1990s, both Canada and the United States began a long, slow process of cutting back on the size of government, which had reached a high in 1992 of 53% of GDP for Canada and just under 40% of GDP in the US. Much as I hate to admit this, the Liberals under Jean Chretien initiated the cycle of government cutbacks that accounted for much of the prosperity Canadians experienced through the late 1990s and into the opening years of the 21st century. Provincial governments also initiated deep cuts to government spending during that time led by Alberta’s Ralph Klein, Ontario’s Mike Harris and Saskatchewan’s Roy Romanow. While the Left in Canada wailed and gnashed its teeth at the “immoral” cutbacks in program spending by various levels of government, those cutbacks resulted in an almost unprecedented period of prosperity experienced by all Canadians. Similarly, the US cut government spending to some 35% of GDP starting in the mid 1990s through 2000, when George W. Bush in his effort to show himself a “compassionate conservative” opened government coffers once again. To be fair to Bush, the 9/11 attacks and the resulting wars in the Middle East accounted for a large part of the increase in government spending, but his Medicaid and prescription drug benefits plan didn’t help the nation or the economy very much. Now that we are in recession wisdom has it that the best way to weather such an economic downturn is through stimulus spending on the part of government, governments in both Canada and the US are getting larger once again. While there is little evidence to support the idea that massive increases in government spending will mitigate the effects of a recession and some fairly strong evidence to the contrary, both American and Canadian governments have thrown oodles of money at their economic problems in order to demonstrate to its less enlightened citizens that the government is doing something. Even if what they’re doing ultimately causes more harm to the economy than good. Given that Mr. Obama’s programs are so thorough and far-reaching, the US will have more and larger government than Canada, for the first time since 1950. The net result of this massive surge in government spending is a prolongation of the recession, if not a slip into downright depression on the order of that plaguing America in the 1930s. Franklin Delano Roosevelt, who introduced massive government intervention into America’s moribund economy in 1930 actually wound up prolonging the Great Depression, which finally ended with the start of World War II. If Barack Obama is really as brilliant as is claimed by his sycophantic followers, then why is he pursuing an economic policy that is clearly detrimental to the American economy? It’s obvious that Mr. Obama is not a student of history, which if he were, would preclude him from having to say at some future time that the operation was a success, but regretfully, the patient died.