Dane Smith: Be not afraid -- government isn't bloated

  • Article by: DANE SMITH
  • Updated: June 6, 2010 - 6:44 PM

Only by distorting reality did recent articles make it seem to be so.

The Star Tribune's Sunday Opinion Exchange section consistently provides depth and intelligent perspective on public-policy issues. But the May 30 cover page, in attempting to present a debate on whether our governments have grown too large, tilted too far toward antigovernment fear-mongers.

A bloated pig (with a gas gauge showing empty) was used to illustrate the piece. Minnesota's leading conservative radio talker, Jason Lewis, was allowed 1,066 words and the dominant place on the page to make exaggerated claims about the scale of federal, state and local government growth. A Miami Herald columnist was given 770 words below the fold to make a somewhat weaker case. And there was no rebuttal to Lewis' claims about government growth in Minnesota and Washington.

Here are a couple of the most-egregious distortions:

First, by focusing only on the single largest employers in Minnesota, and by claiming that a third of those workers are public employees, Lewis implies that state and local governments in Minnesota are much bigger than they actually are.

The bottom-line larger truth is that until very recently Minnesota was reducing public employees as a percent of the total population and workforce, during a decade of large cuts in state income-tax rates and years of accounting gimmicks and government budget cuts.

The Bureau of Labor Statistics reports that, in 2000, 15.2 percent of all workers in Minnesota worked for federal, state or local government. That percentage fell to 15.0 percent by 2007. As private-sector failures and business layoffs mounted in the collapse of 2008 and 2009, the public percentage rose to 15.7 in 2009. But the actual number of public employees dropped during that period and will continue to decline in Minnesota with the further recent slashing of budgets for schools and state and local governments.

The truth is that Minnesota has long been recognized by national experts for its relatively efficient governments and for getting public work done with fewer employees than other states. We now rank about 31st among the states in public employees per capita, according to U.S. Census of Government statistics compiled recently by the research group Minnesota 2020.

Of course, counting the dollars is just as important as counting bodies in assessing government growth. And by the best and most comprehensive yardstick available (the Minnesota Management and Budget office's Price of Government measure), state and local government revenues as a percentage of income have declined from about 17.5 percent during the 1990s to about 16 percent through the last decade.

A second major fallacy was Lewis' creative assertion that government employees are among those "rich'' Americans who continue to amass a larger share of income and wealth. He cites a USA Today report alleging that the average federal employee makes $70,000 and that 20 percent of federal workers make more than $100,000. Even if true, it's a real stretch to suggest that this puts large numbers of federal workers among the true economic elites.

In Minnesota, a $70,000 income doesn't put a household anywhere near the summit, given that the median household income was more than $57,000 in 2008. The bracket that includes the top 5 percent begins at $175,000, and the top 1 percent of households have incomes that begin at about $450,000, according to the Minnesota Tax Incidence Study by the Minnesota Revenue Department. At least Lewis is finally on record admitting that "the rich get richer.''

Aside from providing a clearer perspective on actual growth trends, the most important and substantive response to antigovernment libertarians like Lewis would go like this:

Everybody -- and especially the most prosperous among us in Minnesota and the United States -- actually benefits from taxes and governments. High-income citizens obviously have reaped enormous rewards from our sophisticated and complex public-private economic system, and now have a greater share of wealth and income than since the 1920s.

Without governmental investments -- in education, public health and safety, a cleaner environment, public-works infrastructure and economic security -- the American way of life would deteriorate, inequality would widen, middle-income consumers would have less to spend and invest, and businesses would suffer.

Or, to get it down almost to bumper-sticker brevity: Public stuff is just as valuable as private stuff.

Dane Smith is president of Growth & Justice, a think tank focused on economics and state-local tax-and-budget issues.

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