The problem with “Big” Government–the term, that is–is with the politics. It is often used by the party that is out of power, but in a pejorative way. For the U.S., the Republicans are the Opposition Party, and they will take any and every opportunity to lash-out and harass President Barack Obama–constantly asserting that he is overstepping his bounds and spending money needlessly on unnecessary programs.
When Obama came into office in January of 2009, the American Economy was in hopeless straits. The GDP had dropped significantly, the stock market had lost half its value, the Unemployment Rate was 7.2% and Consumer Confidence was abysmal. Accordingly, the Obama Administration had to initiate numerous projects and strategies to turn things around. Unfortunately, the President’s Stimulus Package was unnecessarily reduced by the Republicans.
Within three weeks of his taking office, the Obama Financial Team began to amass a series of successive positive economic calendar quarters, which hasn’t stopped. The Federal Budget has been reduced by nearly half, the stock market has more than doubled, the Dollar has strengthened, and Unemployment had dropped to 5.6% last month. This month, Unemployment rose to 5.7%, which actually is a good sign, since workers who had stopped looking for work are now confidently searching for jobs again.
The purpose of a government is to do what individuals and corporations cannot do themselves. For instance: maintain a standing military for defense; creating and maintaining a national highway system to expedite commerce and personal travel; establish international pacts and treaties; etc. There are similar functions that state and local government can perform, but more specifically to their local regional needs.
The Federal Government can also provide the initial funding to create large scale enterprises, which are both too extensive and expensive for anyone else to undertake. NASA was the source for funding space exploration, which has both extended our knowledge of pure science and generated many technological applications. The Government provided the seed money for MIT to invent the Internet, in conjunction with several other major universities. Washington has recently granted initial funding for the development of high-speed trains. These are just a few examples of the type of role that governments necessarily have to play. That is called leadership.
The absurdity of the Republicans lambasting President Obama and his Administration was best demonstrated when he did not focus on reducing the National Debt. As noted previously, an Austerity program contracts the Economy, impacts jobs negatively and increases the demands on the social safety net. It does not, however, reduce the National Debt.
So, it is utterly counterintuitive to expect to have any positive success in reducing the National Debt by decreasing the Tax Rolls due to a smaller economy. And contrary to what the GOP had predicted, no one stopped buying our Treasury bonds, interest rates did not skyrocket and inflation has remained low. So, they can castigate Obama for what he has done; but the American Economy is certainly in a significantly better condition than what he had inherited–six years ago. In fact, the International Monetary Fund has continuously pointed to the U.S. as the one major shining light within the overall Global Economy. Stimulus works, and Austerity doesn’t.