When Government is Not the Problem

Written by Keith's Blog For Freedom & Prosperity on September 19, 2011, 08:56 PM

Corporate welfare. Crony capitalism. Whatever you call it, the harm resulting from government interference in the free market is but one example of what can go wrong when government gets into matters beyond its expertise. The evolving scandal concerning the solar panel company Solyndra, which recently went bankrupt after wasting a $535 million stimulus-funded, taxpayer-backed loan, is the latest evidence of big government run amok.

Thirty years ago this past January, during his first inaugural address, Ronald Reagan uttered one of his more memorable quotes: “In this present crisis, government is not the solution to our problem; government is the problem.” Later he made clear, however, that he was not calling for the abolition of government, but the restoration to its proper role:

Now, so there will be no misunderstanding, it's not my intention to do away with government. It is rather to make it work -- work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.

How far we have come since that mild January morning 30 years ago. Over the past three years in particular, we have seen an expansion in Federal power rivaling, if not surpassing, that of the 1930s. And the results have not been good. Here are but a few examples:

• A $700 billion dollar bank bailout (the so-called Troubled Asset Relief Program) that was written so poorly one could drive a GM truck through it;
• A cram down of car company bankruptcy settlements that violated the rights of secured creditors but gave favored treatment to politically-connected parties;
• A nearly trillion dollar stimulus that produced none of the promised jobs but resulted in a debt blowout and scandals such as Solyndra;
• A takeover of the nation’s health care system;
• A government-backed illegal gunrunning program that put weapons in the hands of notorious Mexican drug gangs resulting in the deaths of Americans and Mexicans alike;
• Federal agencies like the NRLB, EPA and newly empowered Dodd-Frank bureaucracies micromanaging various aspects of the economy resulting in billions of dollars of costs.

We’ve had three consecutive annual Federal deficits in excess of one trillion dollars. Unemployment has been at or above 9% for 27 of the last 29 months. Now President Obama proposes a new jobs bill repeating the same failed policies. Mr. President – to paraphrase your predecessor of 30 years ago, your proposals are not the solution; they are the problem.

In his first inaugural address, Reagan warned about abandoning ourselves to a government by elites:

"From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else?"

But if government is the problem, what is the solution? The solution is a return to the limited government vision of the Founders, as such vision has been legitimately amended from time to time in the manner prescribed by the Founders. At the Federal level, every action taken by the Federal government should be scrutinized to see whether it lies within the limited powers delegated to it in the Constitution.

Only when government acts within its legitimate sphere does it stand the chance of being good government. When it’s outside that sphere, the results tend not to be pretty.