Should We Buy More Government?
I'm looking over an August 2002 budget document (PDF) from the Minnesota Department of Finance to get an idea of what the state budget has been like over the years. From 1982 through the 2002, spending growth in the general fund has risen, on average, 6.4 percent per year. Some of that is due to inflation--though inflation has been under 4 percent per year since at least 1993, and the rest, through an increasing population (roughly 1.2 percent per year). Add an inflation rate of 3.5 percent, and we have a "natural" increase of 4.7 percent a year. The leftover of 1.7 percent per year, is the result of deliberate policy choices.

Now, it's true enough, personal incomes have grown during that time (5.6 percent per year since 1992), meaning people can "afford" more government. But it's not enough to say that personal incomes have grown--even if they have kept pace with government spending increases.

Why? Because the percentage of one's income going to any given product or service ought to go DOWN as income goes up. If, as a teenager, you had a car and had to make car payments, those payments were a substantial part of your income. If you are now established in a career, payments on a comparable car would be less of a drain on your income.

But say that you went from a 10 year old Chevy as a teenager to a brand-spankin-new SUV today. Then, perhaps, the burden of the car part of your budget would be the same, because you've upgraded what you have bought. Was that upgrade necessary? Maybe it wasn't; maybe it was. Who am I to say?

We have a similar situation with state government spending--Minnesotans have gotten wealthier, but instead of replacing that Chevy with another of its kind, we've gone out after Lincoln Navigators and Hummers. "Mission creep" is fine when a person freely spends of his own money. But in this case, what is the public good (and thus meriting tax money) has been upsold as well, beyond what is good. (permalink)