Larry Summers explains why the U.S. government can’t be downsized

Larry Summers explains why the U.S. government can’t be downsized

[Ed. – It’s a bogus explanation.  All Summers does is point out that it would be hard to spend less on entitlements and defense.  Which is true, but it’s not what most limited government types mean when they talk about shrinking government.  The limited government types are talking about cutting out whole cabinet departments and losing the regulatory juggernaut that is slowly killing off initiative, jobs, and entrepreneurial spirit.  A lot of them also want to phase out entitlements and spend less and smarter on defense, but it’s a bait-and-switch to say “government can’t be downsized” and then talk only about entitlements and top-line allocations for defense.]

Summers, who was director of the National Economic Council under President Barack Obama, denigrated those efforts and summarized four economic realities that undercut the possibility of downsizing government:

  • The aging population. As people live longer, government programs have more claims on them, so if entitlements are maintained at current levels or even cut slightly, government spending will increase.
  • The unsustainable, dramatic rise in inequality. A role of government, he noted, is to address and “ameliorate” inequality. …
  • Rising national security costs. Summers noted that the three major countries that could be seen as potential American adversaries — China, Russia and Iran — are all increasing military spending at rapid rates. It is unrealistic to think that won’t affect American policy, despite the wishes of many political liberals who hoped government could raise revenue from defense cuts. “To view the Pentagon as a cash cow is a grave and serious mistake,” Summers said.

He criticized the emerging Republican tax plans as counterproductive for the economy and for long-term government revenues.

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