Liberals tend to forget that a bankrupt state has no desire for liberal policies and programs. When the government is out of money, there are no appetites for rabbit disaster remediation plans or the study of mercury contamination in Laotian subsistence fishers.
Janet Daley in the UK points out that even in the UK, putting Leviathan on a diet is no longer unthinkable:
So the experiment is over and the results are conclusive. Part one was carried out under Gordon Brown who, as this column said at the time, tested to destruction the theory that vast increases in government spending would cure all the problems of the public services. The national disillusionment and exasperation which followed on that ideological adventure should have led to an immediate repudiation of it by all rational political leaders. But alas, there was a period of suspended disbelief in which the Conservatives insisted that sticking to Labour’s spending commitments was absolutely necessary if they were to have a hope of being elected. Yes, that was what George Osborne used to say back in the darkest days of modernisation.
Then came the economic crisis of 2008 and that was the end of that. By the time the Conservatives (only just) got into power there was no more question of sticking to anybody’s previous plans. Spending more and more as a solution to everything was over. It was now just a matter of deciding where and how fast you could cut. The political answer turned out to be: not very fast and not at all in some sacrosanct areas.
But even with those limitations, the second half of this on-the-hoof research has been a revelation. George Osborne accepted (at last) in his smug speech last week what many of us have been saying for a long, long time: it is perfectly possible to get better services for less money. Spending on local government has been reduced – and yet people profess themselves more satisfied with its services than they were. Home Office spending on policing has been cut – but crime has fallen by 10 per cent to its lowest level for 30 years.
The facts are now indisputable: the only way to get better performing services is by reforming them. And reducing the money that is thrown at them tends to spur that reform by making improvements in efficiency and productivity more urgent. Indeed, endless unquestioning increases in funding can actually obscure systemic problems and forestall the confrontations with self-interested lobby groups that genuine reform requires. If you haven’t got the cash to buy them off, you just have to have it out with the public sector unions and the Police Federation once and for all. And what happens when you face up to this terrifying reality? Does the earth open up beneath you and the sky fall in? No, everybody pretty much accepts that the game is up; local government works better and crime falls.
There has been a remarkably similar outcome in the United States where the failure by Congress to agree to the President’s budget caused the White House to act on its most terrible threat: the sequester of federal funds. And what happened, when this great abomination was unleashed upon the land? Not a lot. The most notable effect of sequestration so far has been that the Obama administration has put a stop to tours of the White House. There used to be an old pacifist witticism that went: what if they had a war and nobody came? The new version of this might be: what if the government stopped spending money and nobody noticed?
And this is from the UK.