Last Gasp for Limited Government?

Obama charts a socialized course.

By Rich Lowry
http://www.nationalreview.com/
February 10, 1009


Republicans fought an inspired battle against the stimulus bill, holding all but three of their 219 senators and congressmen. They still lost.

Barring a last-minute House-Senate blowup, President Obama will sign a bill spending at least $475 billion (that figure doesn't count the tax cuts) in the first major substantive victory of his presidency. Some of that spending will enter the permanent "baseline" of the federal budget, the starting point for all future budgets that, in the immutable law of Washington, always grow and never shrink.

Obama has had a tougher time getting the bill passed than he expected, and had to try to boost it last night at his first prime-time press conference, a forceful, at times hard-edged performance making the case that the bill stands between the economy and "catastrophe."

Whatever turbulence the bill has encountered, the trajectory toward ever-higher spending is clear. Even pruning the House version of the bill - that is, paring back spending that hadn't yet taken place - was painted as tightfisted and cruel. House Speaker Nancy Pelosi called the "cuts" in proposed spending "very damaging." Just wait 'til the spending is actually in the budget.

Republicans from Ronald Reagan to Newt Gingrich intent on limiting government during the past 25 years only succeeded in a limited way: From 1983 to 2000, the federal government's size relative to GDP fell from 23.5 percent to 18.4 percent. Spending didn't shrink, but it grew at a slower rate than the economy, providing more breathing room for the private sector.

Yet it had bounced back to 20.9 percent last year, and could go as high as 28 percent this year. Newsweek reports that total federal government spending in 2010 will be 39.9 percent of GDP, only about 8 percentage points less than the average in the socialistic "eurozone" countries. Is American exceptionalism about to be bundled off on a long trip to the Continent, never to return?

That's the momentous question posed by Obama's presidency. Those who favor socialism of the creeping variety are feasting on a collapse of Wall Street's reputation as complete as that of the early 1930s, when it was said of disgraced banker Charles E. Mitchell, "If you steal $25, you're a thief. If you steal $250,000, you're an embezzler. If you steal $2,500,000, you're a financier."

The lost moral authority of the financial sector - and the market generally - has accrued to government, now on the hook for $9.7 trillion worth of interventions in the economy.

Whether this program is perceived to work, whether Obama further nationalizes health care and how much of our wealth is claimed by looming entitlements will determine the country's future, and its nature.

The backdrop to the debate over these questions is a roiling, up-for-grabs populism.

The ascendant left-leaning populism feeds off anger at the new "malefactors of great wealth." But a right-leaning populism is building. It takes the same anger, but lumps government in with the malefactors, via its bailout of failed industries and its self-serving irresponsibility symbolized by silly pet projects in the stimulus bill and burgeoning deficits (which Republicans are newly outraged about).

Obama can't get on the wrong side of this populist sentiment. That's why he won't yet ask for more spending as part of the latest bailout.

If Obama manages to cement an aggrandized government, his domestic political accomplishment will equal Reagan's - although in reverse.

The late sociologist Seymour Lipset wrote a brilliant book on why the United States didn't embrace socialism, called "It Didn't Happen Here." In a few years, its conclusion might look premature.