More jobs. Yes, but not at any price
The after-speech buzzword used to describe President Barack Obama's first State of the Union address is "pivot." That is, in this speech his focus pivoted from a wide range of objectives -- health care, financial regulation, war, etc. -- to mainly reducing the unemployment rate. Jobs, jobs jobs, was his mantra, with just a little time devoted to other issues.
While we all can agree on this objective, it is the path to achieving it that will form the battle lines of debate. For this president and his Democratic majority, the path to creating jobs is through creating new government programs. Although lip service was paid to the job-creating machine of small business, it really is all about bigger government.
The financial and economic shock we have experienced over the past couple of years makes many yearn for stability. Humans often feel helpless in such dire times and look to authority for guidance.
When it is a medical problem, we rely on doctors for their expert opinions. When it is unemployment and a stagnant economy, many look to the government to solve the problem. And if this state of the union speech was any indication, you should expect the government to be there for you.
Unfortunately, while this may assuage current concerns, it creates a longer term problem: An erosion of personal freedom.
Isn't that taking it a bit too far? Unfortunately, no. The administration made health-care reform a critical objective for its first year in office. With health costs projected to spiral out of control and with the perilous nature of the economy foremost in the public mind, promoting a huge takeover in this sector by the government was easy.
Public support for the massive overhaul is waning. Among many explanations for this, one is the growing unease that the proposed health-care reforms would simply create yet another entitlement. And as history shows, entitlements -- Social Security, Medicare, etc. -- all necessitate an increase in the bureaucracy to administer them and lead to further reliance on the government.
Entitlements have become the largest component of the massive and increasing federal budget deficit. The president's paean to fiscal conservatives by proposing to freeze increases in non-defense discretionary spending will have little effect on the deficit. Recent figures published by the nonpartisan Congressional Budget Office confirm that.
The president's proposed solutions to our economic maladies, combined with the steady expansion of existing entitlement programs, will inexorably lessen economic freedoms. If you pine for an assisted living society, the state of the union speech was the sweet refrain of hope and change.
Consider the president's laundry list of how the government will help solve your dilemma:
- Two-earner family? The government will subsidize day care.
- College costs rising? Let's cap how much you have to pay on student loans.
- Can't make yourself save for the future? A new government program to nudge you in the proper direction.
- Jobs not being created fast enough? The government will initiate work programs, like sexy though questionable high-speed rail projects. (A billion to cut rail travel time between St. Louis and Chicago by 90 minutes?)
As inviting as these handouts are, they symbolize a steady march down the road that leads to an economy in which the government accounts for an ever-larger role in creating income. In countries where the government's share of total employment and total income has expanded, there is a growing unrest. Bureaucracies tend to perpetuate themselves. Growing government today in the wake of economic difficulties will only entrench its role for the future.
While the debate is not new, the implications remain just as dire. Allowing the government to define what constitutes a "basic right" -- medical care? employment? a college degree? -- means that others must provide for them through increased taxes.
Increased centralization of how resources in the economy are allocated -- what gets produced and who gets it -- reduces individual economic freedom.
R.W. Hafer is the distinguished research professor and chair in the Department of Economics and Finance at Southern Illinois University Edwardsville and a research fellow at the Show-Me Institute. To reach him, contact Beacon features and commentary editor Donna Korando.