How Big Government Never Left.(International Edition; POINT OF VIEW)(on federal spending)(Editorial)

Byline: Sunder Katwala; Katwala is general secretary of the Fabian Society, a leading center-left think tank in London.

Discretionary federal spending has grown even more under Bush than during LBJ's Great Society.

Rolling back the state has been the dominant idea in western political debate for 30 years. The "big idea" of the Ronald Reagan and Margaret Thatcher revolution was that less state equals more freedom. But in the midst of the financial crisis, it now seems that big government is back--and that citizens are glad to have it. The most telling finding from the election-night exit polls is that for the first time since pollsters began asking the question in 1994, a majority of Americans believe that government should do more to solve problems, not less.

But for all the wailing and gnashing of teeth among conservatives about a return to big government, the truth is that its demise has been greatly exaggerated. Reagan changed the mood of American politics, but the antigovernment right failed to significantly roll back the state. He massively increased defense spending while making little serious attempt to cut domestic programs. His tax cuts were popular in large part because he left spending intact, letting the ballooning deficit take the strain. Government spending rose in real terms by almost a quarter during his administration. As a share of GDP it fell, but only from 22.2 percent to 21.2 percent. Even excluding defense personnel, the federal government workforce rose by 200,000 under Reagan, to 3 million.

In Thatcher's Britain, it was a similar story. Public spending as a proportion of GDP was 43 percent in 1980 and 41.9 percent in 1996. There were significant and regressive shifts in the distribution of the tax burden--with large cuts on income taxes at the top offset by increases elsewhere, such as the doubling of VAT, the national sales tax. Priorities between public services shifted--toward policing and defense and away from education and health. But, as Anthony Giddens, the former director of the London School of Economics and the intellectual guru to Tony Blair, has written, "The resilience of welfare budgets in the U.K. is all the more remarkable given the determination of Margaret Thatcher's governments to cut them." Thatcher publicly declared her determination to make the British less collectivist. But she knew that the principle of free universal health care funded out of general taxation enshrined in the National Health Service was almost a secular religion, and promised it was "safe in our hands."

The failure to rein in spending left Bill Clinton and Tony Blair to grapple with the doublethink of much democratic political debate. Calls for "less government" are popular in the abstract, while the concrete calls are for ...