Financial Crisis May Be Only Way to Reduce Bureaucracy

by: Tom Lindmark

You may have heard of the blogger, Foseti, but he’s a new voice to me. I came across him in one of Arnold Kling’s Econlog posts. Foseti is a government worker writing anonymously and writing well. He’s well worth a visit.

Anyway the whole point is that he points to an article at the National Review by Iain Murray, the point of which is to derive some estimate of the actual number of workers in the U.S. that derive their income from government in some manner. The startling number he comes up with is 40 million.

When we add up the true size of the federal workforce — civil servants, postal workers, military personnel, contractors, grantees, and bailed-out businesses — and add in state- and local-government employees — civil servants, teachers, firefighters, and police officers — we reach the astonishing figure of nearly 40 million Americans employed in some way by government. That means that about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer.

You will probably like me have some bit of quibbling to do with the manner in which the estimate is derived. Frankly, it probably over-estimates the number dependent on taxes for their incomes, but even if it’s off by 10% or even 20% it’s still a staggering number.

In fact it poses a couple of interesting questions. Is it possible, given the sheer size of the number of workers receiving a check from the government and their understandable self-interest in the maintenance of the status quo, to truly reduce the size and scope of government? Assuming the answer to that question is yes, how would you employ that many disenfranchised people?

I would be interested in your take. My gut tells me that we are probably past the point at which voluntary downsizing has a chance of success in any meaningful sense. Which suggests that crisis – probably financial – will be the proximate cause of realignment.