Dilemmas and unintended consequences

Whoever occupies the White House after the next election will face a difficult dilemma. On the one hand, there is absolutely no way the government can continue to spend almost twice as much as it takes in, borrowing the rest. On the other hand, to reduce the government back to a size that matches its income will involve putting millions of people out of work. And these won't just be government bureaucrats who are "declared redundant". It will probably involve an even larger number of people in the private sector -- all the people who clean their offices, run their cafeterias, maintain their buildings, provide their office supplies, service their fleet cars, etc, etc etc. Not to mention the millions of private sector contractors who will have to be laid off when their government contracts disappear.

So this "small government" movement has some difficult unintended consequences.

The same is true of the plan to reduce our defense expenditures. Clearly we spend way too much on defense - about as much this year as the whole rest of the world put together. We could spend half of what we currently spend and still have the most formidable military on the planet (if we spent the remainder wisely). BUT reducing defense spending by half would put millions more people out of work. And again, it wouldn't just be military people, it would include an even larger number of contractors and suppliers from the private sector.

So once again, reducing federal spending is a two-edge sword, especially in these times of already-high unemployment.