Government: The Achievement Test

Which is more important: good government or small government?

National destinies are not shaped by what percentage of G.D.P. federal spending consumes. They are shaped by the character and behavior of citizens. The crucial issue is not whether the federal government takes up 19 percent or 23 percent of national income. The crucial question is: How does government influence how people live?

Over the past few decades, Americans have waged political war as if all that matters is the amount of money going into federal coffers. The fights have been about cutting government or raising revenue. But amid this season of distraction the entire society suffered a loss of values and almost nobody noticed until it was too late. Both business and government started favoring consumption and short-term comfort and neglecting investment and long-term growth.

This hasn't been a case of government corrupting capitalism or vice versa. The two have worked hand-in-hand. The government has erected a welfare state that, as Matthew Continetti of The Weekly Standard has pointed out, spends vast amounts on consumption (Medicare, Medicaid, Social Security, interest on the debt) and much less on investment (education, research, infrastructure), while pushing the costs on future generations. Meanwhile, the private sector has encouraged a huge increase in personal debt to fuel a consumption bubble. The geniuses flock to finance, not industry.

For more, see The Achievement Test by David Brooks, January 3, 2011 at The New York Times.