Jeffrey D. Sachs Wants an Expensive European-Sized Government, Which We Already Have

Jeffrey D. SachsColumbia UniversityDone with mucking about in Eastern Europe, Prof. Jeffrey D. Sachs has taken his message that the United States government is neither big enough nor sufficiently control-freaky with regard to the economy to the April issue of Esquire magazine. In a piece touted on the contents page with the blurb, "our government is ready to do great work ... just as soon as we get out of its way," Sachs argues that government is responsible for pretty much all good things and, if fed a higher-calorie diet, Washington, D.C. would shit rainbows and caviar as it leads us into a glorious future. Apart from brushing aside the bad stuff that governments often do (hrrumph, drone-assassinations ... hrrumph, puppycide), Sachs way understates the proportion of GDP that government already spends in the United States as he argues that D.C. is just a tad ... inadequate when compared to its European counterparts.

After tallying up a long wish-list of must-have government programs, including state-run healthcare and "active labor-market policy," Sachs writes in "How Not To Make America Great":

On net, I figure that we need around 24 percent of GDP in total federal outlays in order to have the prosperous, fair, and environmentally sound economy we aspire to. That, in short, is our fiscal bill, or what I have recently called "the price of civilization."

How does it stack up compared with other well-run countries? If we add in state and local spending, we'd have around 38 percent of GDP by governments at all levels. Germany is at 45 percent, the Netherlands at 50 percent, and Sweden at 49 percent. In other words, I am low-balling the estimates given American frugality and bias against government. It's hard to see how we'd get by with any less, unless of course we really decide to live through the twenty-first century with broken twentieth-century infrastructure and technology.

Whoah ... Is that all? Such a bargain! But what is the federal government currently spending? Well, according to the Heritage Foundation, the feds are already cutting checks for 22.9 percent of GDP, and rising fast since "In the past 20 years, federal outlays have grown 71 percent faster than inflation." Commendably, Sachs wants to cut $250 billion in military spending, but he's also counting on savings from a vague "overhaul" of Medicare and Medicaid, and "at least 20 percent" in magical savings from a government takeover of healthcare that would seem to fly in the face of the inefficiencies he sees in Medicare and Medicaid.

Sachs also gets fuzzy with his numbers when comparing oh-so-paltry U.S. government spending to the generous levels in Europe. A peek at the Index of Economic Freedom shows that he has the numbers about right for Germany, the Netherlands and Sweden, but it's hard to see how his vision of an expanded, more active federal government spending "around 38 percent of GDP by governments at all levels" in the United States can possibly come to pass when shriveled U.S. governments are currently spending 42 percent of GDP without his grab-bag of new programs.

Government Spending as a Percentage of GDP

So, the U.S. isn't so far out out of the ballpark as Sachs suggests when it comes to achieving paradise here on Earth with European levels of government spending. But wait! There's more!

When governments engage in the kinds of hands-on management that Sachs favors, and try to extract taxes to pay for it all (or at least most-ish of it), people tend to start working and doing business out of public view. That is, economies are larger than official GDP numbers. Putting aside completely illegal activities and just looking at legal trade conducted out of reach of tax collectors and regulators, the countries Sachs mentions have sizeable shadow economies estimated at the following percentages of GDP:

  • United States: 7.2 percent
  • Germany:14.6 percent
  • Netherlands: 10.1 percent
  • Sweden: 15.6 percent

Add those percentages to the total economies and government spending as a percentage becomes:

  • United States: 39.1 percent
  • Germany: 39.8 percent
  • The Netherlands: 45.5 percent
  • Sweden: 44.4 percent

You can't really see daylight between the U.S. and Germany in terms of total government expenditures as a percentage of the economy. Paradise achieved, right?

I'm sure Sachs would say that federal expenditures are going to the wrong places, and he's right on some points — military spending could certainly be slashed. Government programs certainly are inefficient and mismanaged, too. Good luck with that, Jeff. But American government is already bigger and more expensive than he lets on. And not only is the U.S. running deficits, but so are those European governments — everybody is spending more than they can afford and running into trouble as a result.

Sachs's solution is to raise taxes to a minimum of 22 percent of GDP, but as Nick Gillespie has pointed out, "Since World War II, the government has raised more than 20 percent of GDP in taxes exactly once." That's despite great efforts to haul in as much cash as possible.

In terms of the size of our government, the U.S. is already far more European than Jeffrey Sachs wants to admit. Just like our friends across the Atlantic, we can't afford what we have, bureaucrat-and-regulation-wise. And that's without even getting into the desirability of government-managed ... everything.

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  • Fist of Etiquette||

    This just in: Academia loves central planning.

  • Hugh Akston||

    It works so well at universities though. You have committees meeting about forming committees to investigate the findings of the latest report from the committee on subcommittees. After a few decades of debate in which everyone has been given his or her or other fair say whether or not they know what they are talking about, you arrive at a compromise solution that nobody is happy with and you can't afford anyway because someone on your committee ate with the wrong fork at the Dean's reception and your budget wasn't approved.

    This is obviously the best model for the larger society.

  • R C Dean||

    everyone has been given his or her or other fair say

    Provided, of course, that you check your "privilege" at the door.

  • Brett L||

    Or you aren't adjunct.

  • Anonymous Coward||

    Despite the fact that the academic system is buoyed by cheap federal money and wealthy financers?

  • fish||

    HEY! Enough with the masturbatory material for T o n y and Shreek!

  • ||

    Sorry, we'll try to get more articles with pictures of sexy guppies.

  • fish||

    Hey don't overthink this....how bout more "Lobster Girl"?

  • Voros McCracken||

    You know who else wanted people to get out of the government's way?

  • Hugh Akston||

    Andrew Jackson?

  • $park¥||

    Jesus?

  • ||

    Bakunin?

  • MJGreen||

    Hehehe, nice alt-text.

  • ||

    "our government is ready to do great work ... just as soon as we get out of its way,"

    That is the most offensive thing I've read in a loooooong time.

  • Hugh Akston||

    Nobody is asking for your opinion. Just pay your taxes and pray we don't alter the deal further.

  • CatoTheElder||

    "Just pay your taxes and pray we don't alter the deal further."

    Not so fast, Hugh. Joe M must also wear his seat belt, refrain from smoking in bars, foreswear pot and submit to drug testing, apply for a government id number (SSN) and supply it to all whom he has financial dealings or employment, purchase government-compliant health insurance, and comply with a whole host of other regulations regarding his person and property. And his kids must recite a pledge of allegiance to the flag and the republic.

  • ||

    In other words, the deal has already been altered, and will continue to be altered further.

  • R C Dean||

    prosperous, fair, and environmentally sound economy

    Pretty sure you can't have all three at once, at least not the way I'm sure he defines "fair" and "environmentally sound."

    And, of course, once you've killed prosperity in the name of fairness and the environment, they will follow it into the grave in short order.

  • Aresen||

    I'd be amused at the way the "progressive" crowd promotes the egalitarian fantasy if it weren't for the horrific consequences.

    Once you get a bureaucratic class running the economy, it evolves quickly into a mandarinate that becomes hereditary within a few generations.

    As for the environment: The worst environmental degradation occurred before the era of mechanization. If you don't believe it, just look at Europe and coastal China, where virtually every large undomesticated species vanished long before the arrival of mechanized agriculture. (France was once covered by Oak forests from Normandy to the Alps.)

  • Rhywun||

    "active labor-market policy,"

    Because nothing says "great work" like paralyzing your economy with endless strikes.

  • Andrew S.||

    Don't you get it, Tucille? There's a 42890428x multiplier* for money spent by government. We'd all be obscenely wealthy if not for anti-government weirdos like you.

    * Estimation, may not be accurate

  • sarcasmic||

    When government spends money it creates value out of thin air. It's an amazing thing to watch. Something from nothing. The problem of scarcity is solved!

  • John||

    our government is ready to do great work ... just as soon as we get out of its way,

    The people are unworthy of their government. It doesn't amaze me this douche bag believes this. What amazes me is that the quality of academic leftist douche bag has degenerated so far that one of them could make that statement with no sense of shame and no idea how it references the famous East German communist party statement and the Brecht response. Douche bag lefties used to at least be educated. Now they are not even that.

  • sarcasmic||

    It's all about intentions. When the private sector does things, all they care about are icky profits. That's just money skimmed off the top and given to rich people. For what? For being rich. That's what capitalism means. If you have money it makes money, and if you don't have money you stay poor. No mobility. A totally static system. How fair is that?
    Government isn't burdened by having to give profits to rich people, so it can spend resources much more effectively and without waste.
    Hope that clears things up for you.

  • acidovorax||

    What's hilarious is that this is whom Naomi Klein rails against as a heartless capitalist privatizer in her book "Shock Doctrine".

  • fish||

    Naomi Klein? What's that?

  • Tim||

    'We keep you alive to serve this ship. Row well and live.'

  • MJGreen||

    "our government is ready to do great work ... just as soon as we get out of its way,"

    God damn, when will the hoi polloi get out of the way and let the men with guns have some power for once?

  • Loki||

    What is it with statist douchebags and punchable faces? Every last one them has a face that just seems to be begging for a fist sandwhich. Interesting.

  • phandaal||

    It's because they're attempting to make the "compassionate and learned face" that is expected of all good progressives, yet failing miserably because it never reaches their eyes.

    The combo of "gazing at puppy dog with love and wisdom" and "black eyes, like a doll's eyes, when he comes at ya he doesn't seem to be living" just screams for a punching.

  • Loki||

    Is that what that face is? It looks more to me like the "Why yes, as a matter of fact I am better than you" face that all good progressives are also amazingly good at making. I guess either way it doesn't have its intended effect on me. It just makes me want to knock that shit eating weaselly smirk off his face. Repeatedly.

  • R C Dean||

    Yeah, but look at the eyes. They are cold, calculating, ruthless. The eyes of someone sizing you up for the pot.

  • fish||

    E.J Dionne Syndrome

    "compassionate and learned face" = "the punchable face"

  • SugarFree||

    E.J Dionne Syndrome

    Comb-over infant.

  • Brett L||

    "Please, he has the mind of a child."

  • SugarFree||

    Dionne reduced to just saying "HODOR" over and over would actually be an improvement.

  • phandaal||

    So long as nobody has to see him naked, I second this motion.

  • DJF||

    Jeffrey Sachs had been in charge of the Harvard Institute for International Development when was shut down due to corruption, budget deficits and bad book keeping. Why anyone would listen to him about anything to do with finances is amazing.

    But I guess that corruption, budget deficits and bad book keeping is considered to be a feature not a bug when it comes to government.

  • John||

    But he means well. See sarcasmic above. The fact that he is at best incompetent and probably an outright crook doesn't matter.

  • phandaal||

    Don't worry, that knob goblin got himself a job with Scientific American and other supposedly reputable publications so he could continue to peddle his nonsense.

  • Loki||

    Sounds like he's a perfect candidate for the TOP. MEN. brigade then. I'm kind of suprised Obama hasn't offered him some kind of cabinet or advisor position.

  • RickC||

    I think people like Sachs are slowly eroding my critical thinking abilities because all I can come up in answer to their stupidity is "FUCK OFF!"

  • $park¥||

    Honestly, that ought to be critical enough.

  • R C Dean||

    In a free country, the likes of him would be limited to trying to persuade you of their various projects, and that reply would be entirely sufficient.

  • buybuydandavis||

    After all the talk about the top 1%, the percentage of citizens involved in the legal shadow economy must be a multiplier of the shadow economy percentage, and then add all the citizens involved in the illegal shadow economy, mainly the drug trade.

    A whole lot of the country off the legal grid. I don't think that makes for a healthy society.

  • phandaal||

    To paraphrase Garet Garrett: Government never freed business, it's just that the portion of business in government control shriveled away over time. Business simply grew too fast for government to control.

    He was speaking about the second Industrial Revolution, but it's a fair point to consider today, especially in light of the advances that the Internet has brought about in our modern life: maybe operating in the strictly legal framework isn't always the best way to go.

  • R C Dean||

    operating in the strictly legal framework isn't always the best way to go.

    As a compliance attorney, I can tell you that for many, operating in the strictly legal framework is functionally impossible RIGHT NOW, regardless of your best intentions.

    Either the rules are impossible to comply with, the cost of complying with them is just too high, or, increasingly, its impossible to know what the rules are because they are being constantly rewritten.

    As I've told my Boards for years now, their Compliance Committee is mostly in the business of (legal) risk acceptance, not risk avoidance or risk elimination.

  • Outlaw||

    More shit would be above board if the laws actually made sense and weren't concocted by thieving social engineering control freak assholes.

    There are too many laws and waaaayyyy too many bad laws.

  • Virginian||

    Of all the fundamentally dishonest things leftists do, their continued pretense that the US government is a minarchist one is the most annoying.

    How they simultaneously laud the New Deal, the Great Society, and now Obamacare and yet continuously pretend we're living in a laissez faire system is quite fascinating. It's like that retard in high school who kept watering down his Dad's vodka and then was amazed when his Dad caught him.

  • John||

    If they admitted that we were not living in a laissez faire system, they would have to take responsibility for something.

  • AdamJ||

    I can't stand Sachs because he truly believes in equal outcomes and communism, but he at least realizes that not all govt spending is good spending. He recently wrote an entire editorial calling Krugman out for his ridiculous neo-Keynesian beliefs about spending and debt.

    That said, thinking we're going to get to the level of govt spending he wants without increasing debt and choking the economy is almost as dumb. Almost.

  • Anonymous Coward||

    A modest wealth tax, say 1 percent on net worth above $5 million...


    France, Germany, and other European countries have adopted a Financial Transactions Tax (FTT), and so should we.

    Finally, and for all of us, I would argue that we need a carbon-emissions tax

    Le sigh. Another fellator of power rattling the tin cup for the government while Diamond Joe Biden spends half-a-million for One Night in Paris. And naturally he handwaves the entire question of whether or not it is appropriate for the government to be transferring wealth from one party to another via taxation and subsidies by essentially saying, "it's not that bad."

    Sort of like saying rape isn't rape if it's "just the tip."

  • Agammamon||

    You know its wierd - people who *visit* europe love it (as did I when I visisted) but I also *lived* there (3 and a half years in Sardegna) and would not want to have to live as a citizen of *any* of those countries.

  • John||

    ^^THIS^^

  • Zeb||

    I could see enjoying living there if you are young and unattached and can work at restaurants and bars for cash.

  • GILMORE||

    Jesus Jackhammer Christ, the fucking UberLiberals seem to be going Double-Down, extra-strength, new-and-improved Full Retard lately with the fucking BIG GOVERNMENT=AWESOME! argument... which I can only assume is prompted by the fact that millions in the U.S. are becoming clearly and articulately fucking SICK of it.

    The Lefty rhetorical strategy in the face of pointed, accurate criticism of their failures seems to be to pretend that the only reason Government has failed thus far is that WE HAVENT DONE ENOUGH. MUST SPEND HARDER. Its a debate strategy of simply pretending *you're winning the argument* while all evidence builds around you to the contrary. Meanwhile, you cast your opponent as a "dangerous radical" for being even slightly less excited about the magical powers of unlimited Government.

  • GILMORE||

    " "our government is ready to do great work ... just as soon as we get out of its way,"

    FUCK OFF SLAVER

    Seriously, WTF does he even *mean* by 'getting out of its way'?? What he really means is, "open up your wallets, then bend over and spread them!" Suspend all individual rights and turn over your assets! We're here to help!

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