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The Problem of Big Government by J Hillsdale College, Hillsdale, Michigan 49242 January 1988 Volume 17, No. 1 The Problem of Big Government By J. Peter Grace Editor's Preview: "With all the serious than an ideological nature. For instance, problems we face today, the problem of big at least 600,000 civil service jobs are com­ government is among the most critical." pletely unnecessary, and the President's So says J. Peter Grace, undoubtedly the Private Sector Survey on Cost Control single most effective spokesman for reduc­ recommended in 1984 that they be privatiz­ ing the size and influence of government ed immediately. The survey recommend­ in the business community today. The ed a few other reforms, too - 2,478 of highly-publicized Grace Commission, charg­ them to be precise. But only a small ed by President Reagan with the task of number of these have been implemented. reporting on government waste and inef­ Why? One of the reasons lies in the fact iciency, made 2,478 specific recommen­ that the federal government is controlled dations and demonstrated how more than by Congress. Rarely do people realize how $400 billion could be saved in the first few many day-to-day actions of the government years after their implementation. Further­ are affected by the 535 elected members more, the Commission found that these of Congress who micromanage each agency cutbacks would actually improve public ser­ and thus exert a powerful influence beyond vices, rather than curtail them. Some of their legislative function. the recommendations were followed; most Let me illustrate. Several years ago, John have been ignored. The peril, masquerading Shad, head of the Securities and Exchange under the term "intergenerational in­ Commission, was able to streamline the equity" means that politicians continue to mously bloated bureaucracy when time-consuming and labor-intensive load our children and grandchildren with everywhere in America it is recognized that registration process for the corporations it unbearable debt while refusing to reform the public sector simply does not work as regulates. Consequently, he was also able our current spending policies. Such fiscal well as the private sector, and furthermore, to cut his staff, or RlF (reduction-in-force, and philosophical irresponsibility will in­ it is small private organizations that work as it is commonly called), 230 employees. evitably lead to monetary and moral better than big ones. Two days later, he was summoned before bankruptcy unless we are willing to take action along the lines suggested by Mr. Grace. ''Added to all the other hidden debts Congress here are 2. 7 million federal employees refuses to tell its citizens about, the real debt is in the United States, occupying 2.61 between $4 and $5 trillion." Tbillion square feet of office space, the equivalent of all of the office space in our ten largest cities multiplied by four. These re astonishing statistics for a country that With all the serious problems we must the congressional subcommittee responsi­ claims to be guided by the principle that face today, the problem of big government ble for overseeing the SEC. government ought to play an extremely is among the most critical. Yet solutions "Why are you RlFing 230 people?" he limited role in men's lives. It is even more are not lacking; most of them are readily was asked. He gave them a reasonable surprising that we tolerate such an enor- understandable and of a practical rather explanation. "Come back to the chairman's office, NASA puts out a highly successful for $91.00 , $7 .50 hammers for $435 .00, and we'll talk about this for a few minutes." magazine which is oversubscribed (General and toilet seat covers for $678.00-all due He was presented with a list of items he Electric, alone, requests 5,000 copies each to the specifications which Congress has had included in his agency's operating month), but the Office of Management and imposed. The Defense Department makes budget for the next year. ''Do you want Budget (OMB) insists upon limiting produc­ roughly 1.5 million purchase decisions ea?9- cooperation on this budget?" tion. Some time ago, the editors declared year. It hardly needs the kind of help Cor "Yeah, I have to have this budget." their intent to solicit advertising in order gress has to offer. ' 'All right, then cancel the RIFs.'' to print the magazine privately. Going "Okay, I'm learning." private would also mean a great savings­ So it goes in Washington, D.C. Look at proofreaders from the Government Prin­ Perpetual Debt and Deception the exorbitant freight rates for the Defense ting Office are paid $32,000 a year and can ertinent today is Thomas Jefferson's warning, "To preserve our inde­ Ppendence, we must not let our rulers " .Ralph Nader is unsafe at any speed when he load us with perpetual debt.'' He added, ''We must make our election between suggests that your pre-tax income belongs to the economy and liberty ... or profusion and government and that by giving any of it away to a servitude.'' We are spending $220 billion more than we accumulate in revenues each commission, a church, or any other charity you year. We face a debt of $2.2 trillion. Now, are bilking the government out of its rightful due. you cannot really conceive of a trillion dollars and neither can I. We can figure That is socialism, plain and simple." out the calculations, of course-a million million, a thousand billion-but that is not really going to help us to understand. If someone started ticking off the seconds Department's operations in Alaska and look forward to retiring on 82 percent of since the time of Christ's birth , today the Hawaii: S68 million was spent over a recent their final salary. Ordinary proofreaders, count would be at a little over 65 billion , three-year period. Why? Congress does not in comparison, make about $15 ,000 and with less than seven percent of the task permit competitive bidding for shipping have little or no pension benefits outside finished . It takes 31 ,700 years to count to military freight to and from the mainland of Social Security. But another subcommit­ a trillion, or 317 centuries, and we are only....., for these two states. The average middle­ tee reared its head and prevented NASA in the 20th . But in Washington, D.C American family pays $2 ,218 in taxes, so from going ahead. Coincidentally, most of "trillions " is a commonly used term and it is fair to assume that 34,000 families are the subcommittee members who decided some of our civil servants don't even working all year long to pay that $68 against privatizing the magazine were bother with that; they casually refer to million . senators whose constituents included a "trills." disproportionate share of civil service I've been a businessman long enough employees, many of whom worked for the to have experienced the horrors of unbridl­ About the Author Government Printing Office. ed government indirectly for years, but J. Peter Grace is chairman and chief The head of the Veterans Administration since 1982 , when President Reagan ap­ executive officer of W. R. Grace & Co. , is also under the thumb of Congress. proached me about heading up the Private a New York corporation dealing Changing the jobs of three employees re­ Sector Survey on Cost Control, later known primarily with chemicals, natural quires that a written request be submitted as the Grace Commission, I have been able resources and consumer-oriented by February 1, and Congress has until Oc­ to relate many incidents firsthand. At the businesses. Mr. Grace has held his posi­ tober 1 to respond. Micromanagement is, outset, he asked me to discover the answers tion at W. R. Grace for more than four perhaps, too mild a term to describe what to a series of questions. One of the primary decades, the longest tenure for a chief Congress is doing to our government. ones was prompted by his former gover­ executive officer of any major industrial The Defense Department has certified norship of California. During his own concern. Throughout his career, Mr. that the United States needs 326 military tenure, he knew that federal employees out­ Grace has maintained an active role in bases: We have 4,000 . These include Fort numbered state employees but was unable public affairs. A registered Democrat, he Collins, built to protect Salt Lake City from to discover anything more concrete. As has served as a bipartisan advisor to the Indians, and another installation in president, he felt that it was important to Presidents Eisenhower, Kennedy and Virginia which still has a moat around it. pursue the issue and find out not only how Reagan. His most recent assignment was A move to turn it into a museum was many federal employees there were but as head of the President's Private Sec­ blocked by the congressional delegation where they were located and what they tor Survey on Cost Control, popularly from . need I tell you? Virginia. Typically, were doing. The day after our conversa­ known as the Grace Commission. He the congressmen who complain loudest tion , I went to the OMB and asked thor........, presented this paper at Hillsdale College about the defense budget are the same ones three simple questions. during the April1987 Ludwig von Mises who cavil at such sensible ideas as reduc­ "We don't know " was the answer, and Lecture Series, ''Privatization: Some ing the number of active military bases. I could not get any specific data. So I chang­ Practical Applications and Prescriptions.'' Absurdity leads to absurdity.
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