The reality of trying to shrink government

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Washington Post:

 

The reality of trying to shrink government

By Lawrence Summers, Published: August 19The Washington Post

 

 

Lawrence Summers, a professor and past president at Harvard University, was Treasury secretary in the Clinton administration and economic adviser to President Obama from 2009 through 2010.

 

With the selection of Paul Ryan as the Republican vice presidential candidate, it is clear that the central issue in the presidential election will be the scale and scope of government involvement in the economy. There is disagreement over what constituted “normal” levels of spending in the past and, indeed, over what constitutes “spending.” But there is a widespread view in both parties that it is feasible and desirable that in the future the federal government should be no larger as a share of the overall economy than it has been historically.

Unfortunately, this is unlikely to be achieved. For structural reasons, even preserving the amount of government functions that predated the financial crisis will require substantial increases in the share of the U.S. economy devoted to the public sector.

 

First, demographic change will greatly expand federal outlays unless politicians decide to read more

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