What is the proper size of government? We debate this question endlessly but fail to put it in any context. Americans would be well served by a basic understanding of the size of our government (federal, state and local), as a percentage of GDP, versus the rest of the world. To wit, the wealthiest nations on earth include a significant public sector, bar none. There are roughly 200 countries in the world today and the 34 member nations of the Organization for Economic Cooperation and Development have the highest living standards with an average total public sector of roughly 46% as a percentage of their GDP; the United States is now about 40% and in the lower third of these major countries. President Clinton was fortunately dead wrong when he claimed that the “era of big government is over.”
Government foes should identify what they believe should be the proper mix between the private and public sector as a percentage of GDP, as opposed to offering gauzy pronouncements about “smaller government.” We often hear some version of President Reagan’s old saw that “government is the problem,” but the facts hardly bear this out. Americans might want to ask themselves if they were forced to choose between reducing the public sector by 15% versus increasing it by 15%, which would they prefer? The former would equal Mexico’s 25% government mix and the latter France’s 55% public sector. I think most Americans would choose France.