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With The Paul Ryan Pick, Big Government Becomes the Big Issue (Forbes.com) August 20, 2012

Posted by daviddavenport in Op/Eds.

When Bill Clinton’s political consultant, James Carville, posted the big issue for the 1992 presidential campaign on a sign at headquarters—“The Economy Stupid”—he turned out to be foreshadowing the 2012 campaign as well. But with Mitt Romney’s selection of Paul Ryan as his vice presidential running mate, that slogan takes a subtle turn. The 2012 campaign is still about the economy, but the variation on that theme is now more specifically the role of government in the economy.

NORFOLK, VA - AUGUST 11:  Republican president...Republican presidential candidate, former Massachusetts Gov. Mitt Romney (R) and U.S. Rep. Paul Ryan (R-WI) wave as Ryan is announced as his vice presidential running mate in front of the USS Wisconsin August 11, 2012 in Norfolk, Virginia. (Image credit: Getty Images via @daylife)

Paul Ryan, as Chair of the House Budget Committee and the guy with serious and specific ideas, brings to the fore the big question for Campaign 2012: Do Americans want the Romney-Ryan less government formula of tax cuts for economic growth, along with spending and entitlement cuts and debt reduction? Or do they prefer the Obama-Biden approach of letting tax cuts expire, and promoting more government spending and infrastructure programs to spur economic growth?

With Paul Ryan’s selection, Campaign 2012 has become less about the current recession, instead featuring more prominently the classic conservative-liberal debate of the past 50 years: big government versus market-based approaches to economic stability and growth. In his first appearance as a vice presidential candidate, Ryan quickly emphasized that “we have the largest deficits and the biggest federal government since World War II.” At every campaign stop, he reminds voters that our rights as Americans “come from nature and God, not government.”

By contrast, President Obama is still in love with big government, intent on growing its infrastructure and programs. His constant campaign refrain is more stimulus money to build more railways and fix more roads. In fact, his famous Roanoke, Virginia, “you didn’t build that” business yourself passage came in the context of reminding the audience that what had made America great were all the government investments in roads and bridges, space programs and the Internet. On another occasion, he took it a step further and said that it is the public sector that is suffering, that “the private sector is doing fine.” So even though public opinion polls show most voters disapprove the 2009 stimulus, and that Washington wastes money at an alarming rate, Obama is staying with his big government theme.

But what is the big government debate really about? How do you measure or define big government? And will electing Romney or Obama make any real difference in the size or performance of government? The big government debate is actually a multifaceted set of issues, some of which have very little to do with size and are more concerned with the role of government. But this election is one of few that could make a real difference about that.

For example, bigger government could be a question of revenue, where Romney-Ryan would continue the current tax cuts and Obama-Biden would eliminate them for those in higher tax brackets. So, by that measurement, there is a real difference, with the Republicans leaving more money in the private sector and the Democrats collecting more taxes. Or it could be measured on the expense side. But, in reality, the classic measurement of government spending—federal outlays as a percent of gross domestic product—don’t change dramatically over time. Despite Reagan’s calls for smaller government, federal spending rose slightly during his term (though his supporters blame a Democratic congress), then dipped a bit under Clinton. Ryan is correct, however, that under Obama the federal government now spends at an all-time high of around 25% of GDP, compared with a more typical 18-22% over the last 35 years. Often saying you want to cut spending is government-speak for merely slowing the rate of increase.

But an altogether different way of understanding big government might be its role in the major issues of the day. Clearly the signature legislation of the Obama presidency was health care reform, which greatly expands the federal role in a field—health and welfare—that has always been considered the province of states. Similarly in K-12 education, the federal role has increased significantly in both the George W. Bush and Obama administrations, even though that too has historically been a state and local matter. Of late, Obama has increased his use of executive orders, further expanding both federal and presidential power. So this would be another way of understanding big government, as an entity taking over more and more of Americans’ lives.

As Peter Berkowitz, senior fellow at the Hoover Institution, points out, when conservatives talk about smaller government, it really makes more sense for them to argue for “limited government” instead. The question of big or small government does include the question of size, but it is really more about what role the federal government plays overall. Viewed in that way, there clearly is a difference between Obama-Biden and Romney-Ryan. Obama sees a large federal role in stimulating and supporting Americans toward economic growth, whereas Romney, and especially Ryan, believe that the only meaningful job growth and economic stimulus will happen in the private sector.

With the addition of Paul Ryan to the Republican ticket, Americans will now have a much clearer choice at the ballot box this fall. And Bill Clinton’s famous words from his 1996 State of the Union message—“the era of big government is over”—become a focal point of the fall campaign.

To view the article on the Forbes website please click on the link:  http://www.forbes.com/sites/daviddavenport/2012/08/20/with-the-paul-ryan-pick-big-government-becomes-the-big-issue/

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