Jonathan Chait

Public Distrust Of Government Will Not Shrink Government

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Tyler Cowan makes an interesting point -- countries have had success in cutting spending when the public trusts the government:

The received wisdom in the United States is that deep spending cuts are politically impossible. But a number of economically advanced countries, including Sweden, Finland, Canada and, most recently, Ireland, have cut their government budgets when needed.

Most relevant, perhaps, is Canada, which cut federal government spending by about 20 percent from 1992 to 1997. The Liberal Party, headed by Jean Chrétien as prime minister and Paul Martin as finance minister, led most of this shift. Prompted by the financial debacle in Mexico, Canadian leaders had the courage and the foresight to make those spending cuts before a fiscal crisis was upon them. In his book “In the Long Run We’re All Dead: The Canadian Turn to Fiscal Restraint,” Timothy Lewis describes Canada’s move from fiscal irresponsibility to a balanced budget a history that helps explain why the country has managed the current global recession relatively well.

To be sure, the spending cuts meant fewer government services, most of all for health care, and big cuts in agricultural subsidies. But Canada remained a highly humane society, and American liberals continue to cite it as a beacon of progressive values.

Counterintuitively, the relatively strong Canadian trust in government may have paved the way for government spending cuts, a pattern that also appears in Scandinavia. Citizens were told by their government leadership that such cuts were necessary and, to some extent, they trusted the messenger.

Coincidentally, a new Pew poll shows that American distrust of government has reached a new high. The conservative line holds that this is an ideological reaction to President Obama's socialistic agenda, one that will result in a conservative backlash that will limit the size of government. (See Bill Kristol spouting this most recently here.)

But this analysis gets both the cause and the result of public discontent wrong. First, the cause. Americans have generally grown more distrustful of government since the Vietnam war and Watergate. However, the trend is far from linear, and it correlates pretty strongly with economic conditions. Derek Thompson has a chart here:

Note that massive rise in trust during the 1990s, which corresponded with an economic boom. Conservatives always convince themselves that any positive turn in their political fortunes must result from Americans awakening from their misguided and flukish embrace of Democrats and embracing their small-government roots. The truth is that Americans may oppose spending in the abstract but they favor it in almost every particular. Indeed, one of the Republicans' most powerful attacks on Obama was the charge that he'd cut Medicare, which explains why Kristol has been urging his party to undo Obama's Medicare cuts.

Distrust of government makes Americans distrust everything people in governemnt say or do, including cut spending, which -- with the exception of a few programs seen to help "others," like welfare and foreign aid -- tends to be wildly unpopular. Democratic control of government during an economic crisis has indeed made the party's favorability sink to GOP-esque levels:

But this will hardly help Republicans carry out a small government agenda if and when they take power as a result. If they try, they will probably run into the same buzzsaw that destroyed them in 1995. Or else, like the Bush-era GOP, they'll use their power to tilt the burden and benefits of government in favor of the rich and powerful without really shrinking the size of government.

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