Grover Norquist, a lawyer for the U.S. Chamber of Commerce and one of the key architects of the Republican argument that the solution to societal ills is tax cuts, in 2010 described to Rebecca Elliott of the Harvard Crimson how he sees the role of government. “Government should enforce [the] rule of law,” he said. “It should enforce contracts, it should protect people bodily from being attacked by criminals. And when the government does those things, it is facilitating liberty. When it goes beyond those things, it becomes destructive to both human happiness and human liberty.”
Norquist vehemently opposed taxation, saying that “it’s not any of the government’s business who earns what, as long as they earn it legitimately,” and proposed cutting government spending down to 8% of gross domestic product, or GDP, the value of the final goods and services produced in the United States.
The last time the level of government spending was at that 8% of GDP was 1933, before the New Deal. In that year, after years of extraordinary corporate profits, the banking system had collapsed, the unemployment rate was nearly 25%, prices and productivity were plummeting, wages were cratering, factories had shut down, farmers were losing their land to foreclosure. Children worked in the fields and factories, elderly and disabled people ate from garbage cans, unregulated banks gambled away people’s money, and business owners treated their workers as they wished. Within a year the Great Plains would be blowing away as extensive deep plowing had damaged the land, making it vulnerable to drought. Republican leaders insisted the primary solution to the crisis was individual enterprise and private charity.
When he accepted the Democratic nomination for president in July 1932, New York governor Franklin Delano Roosevelt vowed to steer between the radical extremes of fascism and communism to deliver a “New Deal” to the American people.
The so-called alphabet soup of the New Deal gave us the regulation of banks and businesses, protections for workers, an end to child labor in factories, repair of the damage to the Great Plains, new municipal buildings and roads and airports, rural electrification, investment in artists and writers, and Social Security for workers who were injured or unemployed. Government outlays as a percentage of GDP began to rise. World War II shot them off the charts, to more than 40% of GDP, as the United States helped the world fight fascism.
That number dropped again after the war, and in 1975, federal expenditures settled in at about 20% of GDP. Except for short-term spikes after financial crises (spending shot up to 24% after the 2008 crash, for example, and to 31% during the 2020 pandemic), the spending-to-GDP ratio has remained at about that set point.
The national debt is growing because tax revenues have plummeted. Tax cuts under the George W. Bush and Trump administrations are responsible for 57% of the increase in the ratio of the debt to the economy, 90% if you exclude the emergency expenditures of the pandemic, and have left the United States with a tax burden nowhere close to the average of the 38 other nations in the Organization of Economic Cooperation and Development (OECD), all of which are market-oriented democracies. And those cuts have gone primarily to the wealthy and corporations.
Republicans who backed those tax cuts now want more. They are trying to force through a measure that will dramatically cut the nation’s social safety net while at the same time increasing the national debt by $3.3 trillion over the next ten years.
“There are two ways of viewing the government's duty in matters affecting economic and social life,” FDR said in his speech accepting the 1932 Democratic nomination for president. “The first sees to it that a favored few are helped and hopes that some of their prosperity will leak through, sift through, to labor, to the farmer, to the small business man.” The other “is based upon the simple moral principle: the welfare and the soundness of a Nation depend first upon what the great mass of the people wish and need; and second, whether or not they are getting it.”
The Republicans’ budget reconciliation bill takes wealth from the American people to give it to the very wealthy and corporations, and Democrats are calling their colleagues out.