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HICKS: Focus on shrinking the federal government

September 13, 2014

Small-government sentiment runs strong in Indiana, and we can be pleased with the resulting low taxes, thoughtful regulatory environment and greater personal freedom. Still, I think much of the small-government movement in Indiana targets the wrong problems. In so doing, its supporters perversely weaken their arguments and lessen their influence.

Our founders lived in a world with a, limited federal government, stronger states and robust local governments. In the mid 20th century, power flipped to the federal government as it dealt with world wars, the Cold War and depression, poverty, and civil rights.

In some areas, this worked well; in some areas, we saw only modest improvements; and in other areas, federal involvement worsened the situation at high cost.

Today, many national problems have endured all the federal intervention we can stand. Most problems are local: schools, crime, housing, poverty. But local government and institutions are as weak as ever. Yet here in Indiana, my friends who argue for small government focus almost exclusively on local government.

Our republican form of government promotes checks and balances in two ways. The legislative, executive and judicial branches protect against the concentration of power in one place, but so, too, does federalism itself. Strong state and local governments weaken domestic power of the federal government by forcing tax and spending policies to the appropriate level.

By focusing nearly all their efforts on shrinking local government, our small-government advocates actually promote a stronger, larger and less-responsive federal government. But there’s more to the problem than just this focus.

Lots of Hoosiers want a smaller federal government that is less costly and intrusive. But many of these citizens actually want more state and local government.

I am willing to pay for more sidewalks, better schools, better playgrounds and better-stocked libraries. I have advocated on this page for eliminating the federal departments of energy and education, which would save Hoosiers a cool half-billion dollars. We’d be better off with major local government reforms, but that is not where the big cost savings lie.

Moving spending from the federal to state and local levels gives us more and better choices and a more responsive (and maybe cheaper government). But Indiana’s small-government advocates are content to rail against a local community scraping together $50,000 to spruce up a park while ignoring the unnecessary U.S. Department of Education.

If I were granted one wish this election season, it would be that my friends who advocate small government would turn most of their attention toward federalism issues.•

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Hicks is the George and Frances Ball distinguished professor of economics and director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.
 

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