Gallup Sends a Signal: Big Government Is Feared
The Gallup organization every year surveys Americans' opinions regarding big government. In recent years, the percentage of Americans who fear big government more than any other institution has increased. Here's the most recent graph.
We can see it even more clearly when the polling is broken down into Republicans, Democrats, and Independents. The Republicans are the most fearful of big government.
There was a major reversal in 2001. I have no doubt that this was the result of 9/11. All of a sudden, Americans believed that a strong central government could protect them. But what is significant is this: the reversal of that rapid decline since about 2004. It took longer for the Independents to reverse, but they did.
It has taken about a decade, but the voters finally have figured out that big government remains the biggest threat to their lives. They recognize that the inexorable expansion and consolidation of federal power does constitute a threat to Americans liberties.
The problem has always been this: there is no organized constituency for shrinking the size of the federal government. Republicans always vote to increase the budget of the Pentagon. So, on this aspect of American life, there is concerted support for greater expansion, greater spending, and greater centralization.
With respect to Medicare, Medicaid, and Social Security, which are the major budget-busters, Republicans and Democrats agree with the Independents: they don't want cutbacks. In other words, on the biggest welfare state projects in American life, the voters are overwhelmingly in favor of keeping the present system funded. But that is the heart of the matter with respect to the expansion of the federal government's role in the life of Americans.
In other words, the general hostility against big government, when brought down to specific programs, disappears. The fear of big government is essentially a vapor when it comes to relevant steps for reducing big government, which is to cut federal spending as a percentage of the American economy. The voters don't want the government to do this.
This is why the recent increase in the federal budget went through the Republican party in Congress like a hot knife through butter. There was no Republican opposition. The Republicans in Congress do not want to position themselves as being the party responsible for shutting down the government. The Republicans are also not committed to a strategy of initiating all spending in the House of Representatives, as the Constitution requires. If they did that, then Obama would have to veto the budget, and if he does that, he will get blamed for shutting down the government.
Nevertheless, there is a growing awareness that big government is the big threat to American liberties. No other institution is close with respect to Americans' fears.
THE KEYNES PROJECT
This general attitude in the long run will prevail. When it becomes obvious that the unfunded liabilities of the federal government with respect to Medicare and Social Security are such that there has to be a major tax increase to support these programs, there is going to be tax resistance on a massive scale. The public doesn't care as long as taxes are not raised substantially. The public doesn't care about the size of the federal deficit. We have seen this repeatedly over the past generation. This is why the deficit keeps growing, and the off-budget debt keeps growing. The public is unaware of the implications of this long-term debt in terms of the ability of the government to keep the doors open on Social Security, Medicare, Medicaid, and the Pentagon. The assumption is that deficits don't matter. They do matter, but they don't matter today. They don't inflict pain today. The public only recognizes immediate pain.
The hostility to big government will be a major factor in reversing public support for Keynesianism when Washington's checks finally start bouncing. As long as the checks don't bounce, the public doesn't care which economic theory is dominant. But somebody is going to take the rap when the government simply cannot support the programs. The obvious targets are Keynesians.
This is why there is still an available position for any young economist to establish his reputation as the new Keynes of the 21st century. He will be the anti-Keynes of the 21st century. Most academic economists are bone lazy, and of those who aren't, few of them can be regarded as academic entrepreneurs. They don't predict what future opinion is going to be, and what future opportunities to reverse prevailing opinions will be. I have recommended the Keynes project for over six years, yet nobody has taken me up on it. That's why the position still exists.
What is needed is a multimedia assault on Keynes's General Theory. Nobody is known today as the premier anti-Keynesian economist. This is why the position is still open.
The public is going to change its mind during the Great Default. They are going to want answers for how this happened, and somebody is going to come to the forefront as the premier anti-Keynesian economist who provides the answers as to why Washington's checks have bounced.
Basically, what we need is a 30-year-old economist who understands Austrian economics, and who has read and reread Henry Hazlitt's book, The Failure of the "New Economics" (1959). He has to put this book into contemporary formats: online. It is incredible to me, but this book, which is now over half a century old, has the basics on the illogical nature of Keynesian economics. It was not recognized as a major book when it was published, and it immediately went out of print. It provides at least 80% of the ammunition that a young economist would need to begin a career on the assumption that the Great Default is coming, and that there will be an overwhelming reaction within academia, especially younger academia, against Keynesian economic planning.
There is going to be a similar opportunity for somebody who wants to take on central banking. Again, basic materials are already in print. Austrian economists, especially the Rothbard wing, have done their homework. This needs only to be put into formats that are popular on the Internet.
The lack of entrepreneurship among academic economists, coupled with the lack of commitment to a 12-hour work day, is keeping this from happening.