“Inconsequential” Government

By Christopher Chantrill

Governor Rick Perry (R-TX) has certainly hit the campaign trail with a bang, what with his blast at the Fed for printing money, and his promise to make government “inconsequential.”

To liberals, writes Jeff Jacoby, the idea of making government inconsequential is outrageous. Chris Matthews took the bait immediately.

The governor is saying “not just that the era of big government is over,” Matthews hyperbolically told his “Hardball” viewers on Monday, “he’s saying the era of government is over… Let’s get rid of the government, basically.”

I suppose that is how it plays to liberals.

But beyond outraged liberals, there’s a big issue here. It is the issue of prudence. The bigger and more consequential that government becomes, the more it is likely to create real hardship for people when it makes a mistake. And government finds it very difficult to correct mistakes.

Let’s say it is time to apply the Precautionary Principle to government.

Here’s what I mean.

The federal government made itself real consequential in housing. It legislated mortgage interest deductions, it created government-sponsored enterprises to securitize mortgages, it got really interested in the ways that banks rationed credit to low-income and minority borrowers. But the upshot of all this consequence, at least in part, was a world-wide financial meltdown as the value of mortgage bonds and mortgage derivatives came into question world-wide and the solvency of banks world-wide came into question. And guess what. When the dust settled after the housing crash, minorities and women were hardest hit. Net worth among blacks is down by 90 percent.

Why be surprised? Politicians know about winning elections, but don’t know too much about loaning money to sub-prime borrowers.

I could go on. What do politicians know about retirement finance, geriatric health care, education, energy? They know enough to use them to get elected and reelected.

Let’s back this out further. Down the ages, governments have pretty well taxed and borrowed to the limit. They taxed until they provoked tax revolts; they borrowed until they went broke. In the old days all this taxing and borrowing was done to finance wars of aggression. In our age, after the megawars of the early 20th century, governments tax and borrow to fund entitlements, principally pensions, health care, and relief of the poor. They have made government very consequential in these areas, and they have taxed and borrowed pretty well to the limit in order to deliver lots of pensions and health care and welfare. Unfortunately they have way over-promised, particularly in regards to geriatric health care. That’s Medicare to you and me.

Let’s stipulate that there is an argument for modest programs to help old people who are unable to support themselves or get health care, from no fault of their own. And there are poor people of all ages that need help. Wouldn’t it be better to have small, inconsequential programs to help those in need rather that gigantic programs for the middle class that threaten the very survival of the state when they go wrong?

That’s what I understand when I read about government becoming “inconsequential.”