Big Government

Everyone Agrees Government Is a Hot Mess. So Why Does It Keep Getting Bigger Anyway?

When libertarians dole out blame for the growth of government, perhaps we should take a look in the mirror.


When libertarians dole out blame for the growth of government, perhaps we should take a look in the mirror. Is it possible that our arguments—correct and widely accepted though they are—about government inefficiency, ineffectiveness, and incompetence have had the unintended consequence of fueling government's growth?

For 50 years, Reason writers and other libertarians have preached that government at all levels is bad at what it does, a view that virtually every poll finds to be widespread among Americans of all political persuasions. In his first inaugural address in 1981, Ronald Reagan famously declared that "government is not the solution to our problem; government is the problem." That's a tight summary of what not just a majority of libertarians but most Americans believe these days. But has all this declining trust in government actually led to smaller government? With some meaningful exceptions, the answer is no. The government spends more, controls more, and does more than ever.

A respectable and growing body of research shows that as societies move from relatively high to lower levels of trust, citizens counterintuitively call for greater and greater levels of government involvement in their lives. "Individuals in low-trust countries want more government intervention even though they know the government is corrupt," summarize the authors of a 2010 Quarterly Journal of Economics paper. The history of the libertarian movement is a decadeslong monologue inveighing against virtually every aspect of the federal government, from nation building to the drug war to the Post Office. Should we pause and—like the SS men in the Mitchell and Webb comedy sketch who notice for the first time that they have skulls on their uniforms—ask ourselves: "Are we the baddies?"

And if we are, what might be some strategies worth exploring to win over more people to the side of, you know, wanting to shrink government? Understanding that the relationship between trust in the state and the growth of the state is much less straightforward than it seems is awfully important if we actually want to persuade people that society would be better off with less government.

We Don't Trust the Government Like We Used To

First, the nearly complete evacuation of trust and confidence in virtually every part of the federal government is worth documenting in some detail.

It seems inarguable that libertarian arguments about the general inefficiency, ineffectiveness, and incompetence of most government action have won the public debate. In 1964, according to Pew Research, 77 percent of respondents agreed with the statement that they "can trust the government in Washington always or most of the time." By 2015, that figure stood at just 19 percent.

Last August, Gallup released a survey in which 21 percent of Americans—a plurality—named "dissatisfaction with government/poor leadership" the most important issue facing the country. A different Gallup poll, conducted regularly since the '60s, asks respondents whether "big government," "big business," or "big labor" is the "biggest threat to the country in the future." "Big government" has always been the top response, but the margin of fear has grown far wider over time. In 1969, the fraction picking government was around 30 percent. By 2016, it had leaped to 67 percent.

The overall decline in trust of government is, not surprisingly, reflected in attitudes toward specific functions or parts of the government. Since the early 1970s, Gallup has been asking poll questions aimed at ascertaining how people feel about various institutions in America. Respondents are asked to tell the pollster "how much confidence you, yourself, have in each one—a great deal, quite a lot, some, or very little." The results are stark.

When it comes to Congress, for instance, 42 percent of Americans had either "a great deal" or "quite a lot" of confidence in our national legislature in 1973. (Throughout this article, I'll use that combined figure as the basic measure of high trust or confidence.) In 2018, only 11 percent of respondents did; the last time that number cracked 20 percent was in 2005.

The presidency has taken a similar beating. In 1975—the first time Gallup asked the question, just a year after President Richard Nixon's resignation in the wake of the Watergate scandal—52 percent said they had a great deal or quite a lot of confidence in the White House. In February 1991, 72 percent did, reflecting the popularity of the first Gulf War. By October 1991, though, the number had fallen to 50 percent, and it has mostly remained in the low to mid-30s ever since. The last time a majority of respondents had high levels of trust in the White House was in 2009, Barack Obama's first year in office.

Imagine: More Americans trusted the presidency a year after Watergate than do now.

The other major branch of the federal government, the Supreme Court, has also seen a slide, albeit a less dramatic one. In the mid- to late 1970s, 45 percent to 49 percent of Americans expressed confidence in the high court. During Reagan's second term that number grew, reaching a high of 56 percent in 1988, the year after Robert Bork's nomination hearings electrified the country. The survey from 2018, by contrast, found just 37 percent had high confidence in the Court. And that poll was conducted before extremely contentious hearings over the Brett Kavanaugh nomination, so it's likely that the next iteration will reveal even less confidence in the institution.

While not directly part of the federal government, other major institutions tracked by Gallup reflect what might be considered negative spillover effects. Public schools, banks, and the nation's health care industry are all heavily subsidized, regulated to a substantial degree, or both. In the mid-1970s, up to 62 percent of Americans had high confidence in the nation's K–12 system. Over the last decade, it's been rare for that number to pull out of the high 20s or low 30s.

About half of us had confidence in banks for most of the 1980s. But following the savings and loan crisis of the late '80s and early '90s and the housing collapse and financial crisis of the late '00s, the percentage with high confidence in banks has also been stuck in the high 20s and low 30s.

Something similar happened to the health care sector. In 1975, the first time Gallup asked about "the medical system," 80 percent expressed confidence. By the early 1990s, as Bill Clinton proposed a much larger role for the government in delivering health care, the confidence level was down to the mid-30s to low 40s, where it remains.

In 1964, according to Pew Research Center, 77 percent of respondents agreed with the statement that they "can trust the government in Washington always or most of the time." By 2015, that figure stood at just 19 percent.

Not all parts of the government are losing trust. Gallup started tracking attitudes toward the military in 1975, when 58 percent expressed high confidence. During the last decade, that number has never dipped below 71 percent and has climbed as high as 82 percent (in 2009); it currently stands at 74 percent. Similarly, confidence in the police has remained at or above 52 percent since Gallup first asked about it in 1993. (It's currently at 54 percent.) Confidence in the criminal justice system has actually improved since the early 1990s, when it clocked in at under 20 percent on a regular basis; it was 27 percent a year ago and now stands at 22 percent.

These anomalies are all the more striking given the relative unpopularity of military action in the Middle East and Afghanistan, the series of highly publicized recent cases of police brutality, and increasing calls for sentencing reform.

It's (Always) Government's Fault

Who's responsible for this decline in trust and confidence? As with assigning responsibility for an overtime loss, a group project gone wrong, or a global financial crisis, this isn't easy, and any given accounting is likely to be incomplete and contested. Demographic changes, world events, religious belief, long-term economic growth, and status relative to other countries are all factors. Note also that we don't just trust government less than we used to; we trust each other less too. In 1972, according to Pew, 46 percent of Americans agreed that "most of us can be trusted." By 2015, even after a decadeslong decline in crime, that number had dipped to 31 percent.

But the most powerful reasons for collapsing trust in government are surely the actions of government. Consider even a smattering of revelations and developments going back to the late '60s. The U.S. failure in Vietnam was bad enough on its own, but the Pentagon Papers, a secret report commissioned by the Defense Department that concluded our involvement was doomed from the start, revealed a government that was incompetent at best and duplicitous at worst. The Watergate scandal and revelations of widespread corruption in the Nixon White House led to the unprecedented resignation of a president who had won re-election by the largest Electoral College margin up to that point in history. (What suckers we were, giving a crook 61 percent of the vote!) High-profile government commissions issued reports showing that intelligence agencies and the military had engaged in illegal surveillance of American citizens and tested would-be mind-control drugs on unsuspecting soldiers and civilians.

Even as the economy grew in significant ways and many consumer goods became more widely available, there was in the 1970s a pervasive feeling of economic malaise, especially because the federal government seemed incapable of reeling in double-digit inflation and unemployment. Wage and price controls were tried, along with the rationing of gasoline, that most basic of commodities. None of these interventions worked as intended. By the time inflation was tamed and unemployment brought down, the Iran-contra scandal was casting the Ronald Reagan administration in a terrible light and the savings and loan crisis was beginning to erupt. In 1989, Rep. Jim Wright (D–Texas) became the first speaker of the House forced to resign in the wake of a financial scandal.

The Clinton years seem distant and quaint now, but they were marred by never-ending scandals, only some of them sexual in nature and only some of them involving the president and first lady. Largely forgotten, the discovery of corruption involving the congressional "post office," which functioned as a bank for members, contributed mightily to the GOP winning the House and Senate in 1994. Almost two dozen congressmen were singled out by the House Ethics Committee for kiting checks and abusing various privileges afforded them. The fallout was bad enough that Speaker Tom Foley (D–Wash.), who had himself replaced Wright, was bounced from office—the first time a sitting speaker had lost a re-election race in more than 100 years.

The rise of cable and online news in the '90s meant that this sort of thing crawled along the bottom of our screens every time we flipped through an ever-growing array of channels or refreshed our web browsers.

The 21st century brought its own set of highly publicized scandals and other ugly revelations. False accounts of "weapons of mass destruction" underwrote the U.S. invasion of Iraq; more broadly, we've been waging inconclusive and increasingly unpopular wars for virtually all of this century. Secret mass surveillance programs were exposed under both Republican and Democratic administrations. Even if most people don't understand all the nuances of the banking and housing industries, they understand that the federal government was intimately involved in inflating a housing bubble that helped cause the biggest financial crisis since the Great Depression. Perhaps more important, they have a sense that the government's responses to the Great Recession—bank bailouts, auto bailouts, stimulus spending—mostly had the effect of shunting money to well-connected industries and firms.

It's bad enough that government can't be trusted; it may be worse still when it's impotent. Often, when the state waves its wand—at the Middle East, at health care, at the economy—its magic is weaker than a first-year student's at Hogwarts.

Government Is Getting (A Lot) Bigger

And yet cynicism about government hasn't diminished government. Over the last few decades, Washington's size, scope, and spending have metastasized.

Per Milton Friedman, federal spending is the purest, or at least the most easily grasped, measure of the size of the federal government, because we eventually have to pay for it all. In inflation-adjusted dollars, the government spent about $1.3 trillion in 1968 vs. a record-high $4.1 trillion in 2018. Over the last 50 years, federal spending on a per-capita basis nearly tripled, reaching about $12,000 in 2018. In 1970, federal spending as a percentage of gross domestic product was 18 percent. Since 2008, it has never sunk below 20 percent, a level typically reserved for periods of major wars.

In the final budget year of George W. Bush's presidency and the first of Barack Obama's, Washington responded to the financial crisis by jacking spending up to what seems to be a permanently higher level. The Congressional Budget Office estimates that over the next decade, federal outlays will average 22.4 percent of GDP annually. Within a few years, interest payments on the national debt—$22 trillion and growing—will be larger than annual payouts for Medicaid and the Pentagon, two of the largest single items in the federal budget. When it comes to spending, it's onward and upward.

Why Loss of Trust Leads to Growth in Government

Counterintuitively, the less trusting of government we become, the more likely we are to call for more regulation by that same government. "When individuals distrust others, they prefer government officials to regulate and control, even when they know that these officials themselves cannot be trusted," observed Philippe Aghion, Yann Algan, Pierre Cahuc, and Andrei Shleifer in the aforementioned Quarterly Journal of Economics article.

Their paper drew on the World Values Survey, which has collected data from 50 countries for decades. One example they cite involves relative levels of regulation on starting new businesses. "High-trusting countries such as Nordic and Anglo-Saxon countries impose very few controls on opening a business," they write, "whereas low-trusting countries, typically Mediterranean, Latin-American, and African countries, impose heavy regulations." A similar pattern occurs when it comes to setting wages. Residents of low-trust Russia, Slovenia, East Germany, and Bulgaria "exhibit[ed] the strongest support for government control of wages. Approximately 92% of Russians and 82% of East Germans favor wage control. Respondents in Mediterranean countries also strongly favor wage control by the state: 78% of the Spaniards and 60% of the French agree" that the government should control wages. Meanwhile, "in Anglo-Saxon and Nordic countries, less than half the population agree.…Similar patterns obtain for the support of government control of prices."

But why do people in low-trust countries turn for protection to governments they know are at best incompetent and at worst corrupt? I talked about this dynamic with one of the paper's co-authors, Andrei Shleifer, who grew up in the old Soviet Union, moved to the United States as a teenager in the mid-1970s, and now teaches economics at Harvard.

When people perceive that their world is out of control and unpredictable, Shleifer says, they want order to be restored—the faster the better. "They want regulation. They want a dictator who will bring back order." Often, he adds, the rules and restrictions create a negative feedback loop. In response to loss of trust, governments set up new regulations that make it harder to start businesses. Those policies tend to lead to fewer businesses and less employment, which in turn leads to slower economic growth, which leads to calls for more redistribution and yet more regulation.

Weak or nonexistent economic growth is the deep background for the loss of trust throughout society, according to the George Mason University economist Alex Tabarrok. Like Shleifer, Tabarrok is an immigrant, in his case from Canada. Up through the early '70s, he explains, annual economic growth averaged about 3 percent a year in the United States. Since then, it has become both more volatile and weaker overall. For most of the 21st century, it has averaged around 2 percent. "When everyone is getting wealthier and the economy is humming along and things are improving, it's easier to trust other people," Tabarrok says. "If the economic pie is relatively fixed, you distrust other people more because you know the only way someone can get ahead is by screwing you and vice versa."

Then there's the populist rhetoric, coming from politicians as different as Donald Trump and Bernie Sanders, that accuses American leaders of selling out their own citizens while furthering the interests of the European Union, Russia, China, and other foreign powers. The idea that "the system is rigged" is far more widely represented in retail politics than it was a few decades ago. That's both a cause and an effect of the loss of confidence in government. Shleifer stresses that while things in the aggregate are getting better—for virtually everyone in the United States, the standard of living keeps ticking up—the situation is "more volatile." You don't get a job until later in life, he says, and when you do, it seems less secure than the one that your parents or grandparents had.

Shleifer points to the economic expansion that has been underway since 2009. "This economy has bounced back tremendously from the Great Recession and much faster than Japan or Europe," he says. Yet there's still a widespread perception among many people that getting and keeping a job are beyond their control. That palpable lack of agency orients people to push for government intervention.

Don't Expect Pols To Change Their Behavior

If trust and confidence in government have declined mostly due to the behavior of politicians then the country's political class should do most of the heavy lifting in restoring people's faith, right? Good luck with that.

During the last election season, the GOP challenger to Pennsylvania's Democratic governor released a Facebook video declaring he would "stomp all over" his opponent's "face with golf spikes." Donald Trump's M.O., which is clearly taking root in the Republican Party, is to alienate and polarize real and imagined adversaries. And Trump and the Republicans are nearly matched in intensity and frequency by leaders of the Democratic opposition. Rep. Maxine Waters (D–Calif.) has called for partisans to harass Republican officials in restaurants and other public places. While campaigning for Democrats, former Attorney General Eric Holder said, to great applause, "When they go low, we kick 'em. That's what this new Democratic Party is about."

You can't "be civil with a political party that wants to destroy what you stand for, what you care about," former Democratic presidential nominee Hillary Clinton told CNN last fall. She added that civility will return to politics only if and when her party takes control of Congress.

If confidence in government has declined mostly due to the behavior of politicians then the country's political class should do most of the heavy lifting in restoring people's faith, right? Good luck with that.

This sort of discourse is not conducive to increasing trust and confidence in government. It's also a sign of a government that already inspires low levels of faith. Shleifer and his co-authors rely on research that shows a "causal link runs not only from beliefs to policies but from policies to beliefs as well," which suggests a sort of infinite loop.

Tabarrok is generally pessimistic that political trust can be regained any time soon, especially in a climate where candidates explicitly use the lack of trust as a means to gaining power. He says Donald Trump is exemplary in this regard, castigating his primary and general election opponents as "crooked" and "lying" and threatening not to abide by the election outcome if he didn't win. But Trump is not alone in questioning the legitimacy of the government, as evidenced by the fact that Hillary Clinton has herself repeatedly questioned the results of the 2016 race. Just a few weeks before Election Day, she tut-tutted Trump for refusing "to say that he'd respect the results of this election" if he lost. "By doing that," she added, "he's threatening our democracy." Yet in the wake of her loss, she told Mother Jones that "there are lots of questions about [the election's] legitimacy." She pointed to Russian troll accounts on social media and what she claimed were "widespread voter suppression efforts."

There are some odd ducks, such as Rep. Justin Amash, the libertarian-leaning Republican from Michigan, who seem to speak a different language. Amash has the distinction of being openly reviled by the two GOP speakers of the House under whom he has served. John Boehner famously cursed him out for forcing votes on National Security Agency domestic surveillance, and Amash says Paul Ryan literally refused to acknowledge his presence on multiple occasions.

Judging from his Twitter feed, Amash's relationship with new Democratic Speaker Nancy Pelosi may not be much better. Last year, for instance, he called her out for working with her predecessors to weaken privacy protections, writing, "Every time I brought Rs and Ds together to protect Americans' personal data and #4thAmendment rights, you teamed up with @SpeakerRyan or @SpeakerBoehner to defeat us. You spearheaded the Democratic charge against two separate Amash amendments on the #PatriotAct and #FISA702."

Alone among members of the House and Senate, Amash entered office in 2011 pledging to explain on his Facebook page every vote he makes. During an interview with Reason last year, he outlined a transparent approach to politics that certainly would inspire more trust if widely adopted: "I think that if you go and you put yourself before them, as I do at town halls and other things, and you explain yourself, people will connect with you. They'll appreciate what you're doing. They may find that they agree with you on so many things that they didn't think they agreed with you on. They'll find that you share the same principles that they share. You just have to put yourself out there and be open."

But to expect the political class writ large to change its behavior is surely asking too much. If trust is to return to government, the process probably won't be led by politicians.

Other Routes To Restoring Trust

A revitalized sense of national purpose might help to tamp down distrust. Of course, the one reliable cause that unites the nation is war, and even that unwelcome unifier has its limits: Since at least 2004, most Americans have considered the conflict in Iraq to be a mistake.

Tabarrok suggests that national purpose might come not from government but from figures such as Elon Musk, the entrepreneur who has underwritten private rocket launches, new ways of creating and storing power, and transportation projects such as the hyperloop, a "vactrain" that theoretically can move people and freight far more efficiently than traditional modes of ground transportation.

The most likely path to increasing trust in government is economic growth that's not only robust but widely understood to be sustainable. From 1994 to 2001, Pew data show upticks in the number of people who trust the government to mostly do the right thing. That was a period of partisan rancor nearly as intense as the current moment, when a Republican Congress led by Newt Gingrich engaged in bombastic rhetoric and Bill Clinton's Democrats often gave as good as they got. The increase in trust was surely partly an artifact of years of strong (though not uninterrupted) growth.

It also coincided with a flattening of spending: Using inflation-adjusted dollars, the feds spent about $250 billion more in Clinton's last year than in his first, a small increase compared to the spending surges seen under Ronald Reagan and George W. Bush. Viewed as a percentage of GDP, federal spending fell significantly during that period. In 1991, it equaled 21 percent. By 2001, it equaled just 17.5 percent.

Since 2008, it has never been less than 20 percent of GDP.

The U.S. economy has been growing consistently for nearly 10 years, and the two most recent quarters have seen relatively high annualized growth rates of 4.1 percent and 3.5 percent, respectively. Wage growth over the last year clocked in at 2.9 percent, the biggest increase in a decade. (While forecasts are often off, there is a broad consensus that growth in 2019 will be slower than it was last year.)

But there is an interesting disconnect in public opinion, with two-thirds of Americans believing that the country is headed in the wrong direction and about the same fraction saying that the economy is headed in the right direction. According to a poll conducted by CBS News in January, during the monthlong partial shutdown of the federal government, the top reason people cited as evidence that we're going the wrong way is "the state of politics and government" (64 percent). While attitudes toward the current economy are positive, there is a feeling of longer-term gloom, with 42 percent of respondents saying they believe life will be worse for the next generation, compared to just 30 percent who said it will be better.

Deregulatory initiatives at agencies such as the Food and Drug Administration and the Environmental Protection Agency could help keep the economy humming, as could recent tax cuts for individuals and businesses (especially provisions that allow profits made overseas to be brought home without being subjected to taxes). But when you add in Trump's trade wars and a general sense of paranoia about the country being invaded by immigrants and foreign goods—a staple of the president's rhetoric—the effect is a sense of uncertainty, not sustainable growth. And the swelling national debt, fueled significantly by those Republican tax cuts, is a looming iceberg that moves ever closer, threatening to either sink the economy or put the country through a wrenching reduction in entitlement spending.

Two full years into his first term, Donald Trump maintains historically low approval ratings. He has been less popular at every point of his presidency so far than any president since the end of World War II, which is hardly likely to make people relax and believe that the relatively strong economy is going to last. Add to that the change of power in the House of Representatives, with Democrats promising to investigate the hell out of Trump while pushing for massive expansions in spending (Medicare for All, the Green New Deal, etc.), and the future looks increasingly volatile and partisan.

Yet there are potential ways forward. Local and state governments have always inspired significantly higher rates of confidence than the feds. In 1973, according to Gallup, the percentage of people saying they had a "great deal" or a "fair amount" of trust in their local government was 63 percent. It currently stands at 72 percent. State government inspired the same 63 percent in 1973. After going as high as 80 percent in the late 1990s and as low as 51 percent in 2009, it's back to 63 percent today. If voters are more comfortable with government that's closer to home, shifting decision making out of Washington and back to state capitals and city halls might help restore confidence.

That means more work is needed putting together serious, detailed policy plans that give more autonomy to individuals and communities; highlighting examples of markets and voluntary organizations succeeding in building trust, self-regulation, and common purpose; and appealing to a broad, positive vision of a strictly limited government whose goals revolve around ensuring basic fairness, equality of opportunity, continued economic growth, and rising living standards.

Parents of children who attend charter schools or other public schools of choice report higher rates of satisfaction than parents whose children attend traditional public schools based on residential assignment. For instance, according to a 2012 Education Next study using Department of Education data, 65 percent of parents with a child in a charter school reported being "very satisfied" with the school. For other forms of public choice schools, the response was 61 percent. For traditional residential assignment schools, it was 56 percent.

Libertarians should be championing policies that increase local control and individual autonomy. The various regimes that have surrounded the legalization of marijuana provide a wealth of outcomes that are better and worse. For the most part, Colorado—the first state in the country to fully legalize recreational pot—has managed to get things right by allowing municipalities to opt in or out of allowing weed to be sold, by setting taxes low enough to discourage black markets, and by tracking use rates to alleviate fears that teenage consumption would increase after legalization. (It hasn't.) That experience can and should be compared to places such as California, where regulation is more onerous, a black market flourishes, and other problems abound.

It may seem odd that loss of trust in government would give rise to calls for more government. Odder still, it may fall to libertarians to identify and promote government policies that give people enough breathing space to imagine a world where we ask the state to do less for us.