I was doing some research into comparing nations in terms of economics, freedoms, democracy etc. for my own interests. And I came across an article on Open Left from 2009 that I hadn't seen and I find very interesting. I think there are flaws in the analysis, but it is a simple and reasonable analysis that basically asks (in my opinion...the article is slanted a bit differently) whether the Republican/Libertarian talking point that low government spending is always good, as most infamously phrased by Grover Norquist's "Drown America in a Bathtub" approach to government has any validity when you actually look at reality.
Reality basically slaps the Republicans and Libertarians in their collective face here.
Republicans and Libertarians try to argue, against most evidence, that government spending is detrimental to the economy and reducing government is always a good thing. Let's look at numbers to see how true this is. Below is from Open Left. It uses numbers mainly from the CIA World Factbook (hardly a leftist source) and simply divides real government spending by nominal GDP to compare a select group of countries (the G-20 with some selected other nations for comparison). This is simple minded, but so is the claim that government spending is always bad and it is a fairly direct way of testing their claim. I am a scientist, so I like to test claims with numbers.
Based on Republican and Libertarian arguments, the nations at the top of the list (where government spending is high as a % of GDP) should be miserable economies and those at the bottom of the list (where government spending is low as a % of GDP) should be Libertarian paradises. If you only looked at the top and bottom country, you could make such an argument at least vaguely: Cuba vs. Brazil. Most of us would prefer Brazil (low government spending) to Cuba (high government spending). But the Libertarian myth breaks down after that.
Nations where gov't spending is a higher percentage of GDP than US:
Nations where gov't spending is a lower percentage of GDP than US:
Now, interestingly, China and Russia have lower government spending than the US. This suggests that Republicans and Libertarians would prefer Russia and China as role models for US government spending over nations like France, Sweden and the Netherlands.
Look at the two lists: which nations would you prefer living in? Overall I'd say the nations with higher government spending are the better ones, though there are exceptions.
Also compare the strength of the economies. Are the ones at the top of the list worse than those on the bottom of the list? Cuba drags down the top of the list, but other than that, the economies at the high end of government spending are STRONGER than those at the low end of government spending.
But I think the key lesson is NOT that one approach is inherently better. The bottom line is that the Republican/Libertarian myth that lower government spending is better for an economy is complete BS. There is no truth to it at all. If anything the evidence points the other way, but I wouldn't even go that far. I would just say that the evidence DISPROVES the Grover Norquist "Drown America in a Bathtub" approach to government. Why do the Republicans and Libertarians insist on clinging to a fairytale?
Open Left analysis below.
With the exception of the United States and the United Kingdom, where better data is available (see here for the US and here for the UK), the following data comes from the CIA World Factbook. It measures the percentage of socialism in major world economies by dividing real government spending by nominal GDP for selected countries (numbers for all countries except the UK and USA are from 2008):
Levels of socialism in G-20 nations, plus selected other economies
United States: 44.7% (2009)
United Kingdom: 42.1% (2009)
Saudi Arabia: 40.4%
United States: 35.5% (2007)
South Africa: 33.9%
South Korea: 29.3%
I think the lesson is simple. Reducing government spending and lowering taxes on the rich are NOT THE ANSWER. They do not strengthen the economy and they don't make the nation more pleasant to live in. America needs to abandon the Republican "Drown America in a Bathtub" fairytale.