Federal Swelling
Extraordinary affluence is obviously changing the nation's political agenda. Less obviously, and ominously, it is changing the nation's political sensibility, reducing to the vanishing point the once-sturdy concern for limited government.</br></br>The nation's freedom and prosperity have been secured. The problems that dominate day-to-day legislative business--e.g., reducing pollution and congestion, improving medical care, providing more police--are not resource problems: The sacrifices involved in paying for such things are not prohibitive. Christopher DeMuth, head of the American Enterprise Institute, argues that although Americans are unprecedentedly prosperous, self-sufficient and at peace with one another, government continues to grow prodigiously because of little- understood dynamics.</br></br>Government outlays (federal, state, local) and regulatory costs-- largely imposed on the private sector--have grown more than 50 percent faster than the economy for 50 years and now claim more than one-third of GDP. The federal government owns one-third of all land, pays for 40 percent of medical care, manages nearly 50 percent of individuals' retirement funds and regulates many industries. Most Americans live and work in a web of government rules.</br></br>Forces working to inhibit government include globalization--the ability of capital and services to move to hospitable locales--and technological change. For a quarter-century, says DeMuth, the government has been trying and largely failing to regulate the computer industry: "Although it may lasso an individual firm such as Microsoft, it has no hope of corralling the entire industry as it did trucking and railroads in an earlier age."</br></br>However, more private wealth means more resources for the traditional lobbying of government, and more incentives for government to try something new. It is what DeMuth calls "the New Executive State" expanding through extortion.