You don’t have to be a political guru to peg 2009 as a watershed year in American public policy. But even seasoned Washington insiders might not appreciate just how special that year was.
Not only did the federal government effectively take over half of the U.S. economy, it also expanded public-sector debt by more than all previous governments combined. And much of that growth in debt came in programs that actively increase citizens dependence on government.
According to preliminary estimates by the Heritage Foundation’s Center for Data Analysis, the Index of Dependence on Government grew by 13.6 percent in 2009. That’s the largest single-year expansion in dependency-creating programs since 1962 - the year before Lyndon Johnson’s “Great Society” launched.
The excesses of 2009 are proving to be “a bridge too far” even for the massive American economy. With both U.S. spending and debt in hyper-drive, the International Monetary Fund is openly worried.
Last week, the IMF announced the United States now ranks second in terms of countries that risk financial calamity unless they reduce their structural deficits. The IMF predicts our public-sector debt for all governments will equal our total gross domestic product (GDP) in just five years unless we act immediately to cut deficits by an amount equal to 12 percent of the GDP. Even woeful Greece needs to cut its deficit by “only” 9 percent of its national output.
So, how is debt and dependency connected? And, how can we avoid the pain and embarrassment California and Greece are now experiencing?
To answer that question, let’s take a step back and focus on dependency-creating programs.
Let’s be clear: Each of us will be dependent on others many times during our lives. And there’s nothing wrong with that. We spent most of our childhood utterly dependent on our parents, and many of us will be grateful for caregivers during our last years. Dependency on family, neighbors, fellow members of community groups and local government is the normal, everyday stuff of life.
Indeed, when I receive aid from someone in my immediate or extended circle, I’m given an opportunity to repay that aid someday in a similar way. Mutual aid is the glue that binds together communities and gives strength to families and the greater civil society. Most Americans instinctively know that creating strong communities and families is a matter of caring for each other.
When the federal government provides aid, that aid also binds the dependent person to the aid giver. However, the aid is certainly not mutual: No one expects the dependent person today to one day give similar aid to the federal government.
And it certainly doesn’t strengthen communities and families: If we’ve learned anything about the federal welfare system, it is how effectively an open-ended, non-demanding entitlement can undermine families and hollow out communities.
Worse, dependency-creating programs quickly morph into political assets that policymakers readily embrace. Voters tend to support politicians or political parties that “give” them higher incomes or subsidies for the essentials of life.
However well-meaning policymakers were when they created these aid programs, these same programs quickly grow beyond their original mission. They become easy assets for politicians, but they carry huge social and economic liabilities for the nation.
Liabilities? Just look at Greece, Italy, Portugal, France, Spain, Britain, Japan and a host of other countries that dramatically expanded health, retirement, housing, food and education programs during good economic times. These one-time assets are now dragging down those economies.
Today, each has either fallen into - or teeters on the edge of - a financial emergency. Policymakers are loath to take the remedial action so obviously needed, principally because spending on these programs cannot be cut back without enormous political pain.
That’s why the IMF is so concerned about America’s rapid run-up of debt … and why every American should be concerned, as well. We should view the problems that European governments have in reforming their dependency programs as a movie trailer of sorts for the problems the U.S. will face in the not-too-distant future unless we act wisely now.
Rather than continue along the path to financial ruin, the federal government must recognize its limitations. It should let the tens of thousands of community groups and the millions of families reassume more of their traditional responsibility for aiding those in need. These small-bore social units work more efficiently than government and at less cost. Plus, there’s a greater likelihood that people in trouble today will get back on their feet faster with the help of neighbors and loved ones than with help from a bureaucrat.
It would make the IMF happy. More importantly, stronger families and communities would assure a stronger, more prosperous U.S. And, with all of this debt to repay, we’ll need all the strength we can get.
• William W. Beach is director of the Heritage Foundations Center for Data Analysis and lead author of its annual “Index of Dependence on Government” report.