US beats many European Countries in the Spending Arena

We all realize that different types of governments cost various amounts to run. Those in which the government does less, typically have stronger financial portfolios. Those in which the government does more have much weaker financial pictures.

Fox News recently asked "How much money does it take for the governments of sovereign nations to do their job?" Those that are socialist or social democratic suffer from huge budgets and looming deficits as they strive to provide "cradle-to-grave" spending programs. Most Americans assume that countries like Sweden and France have massive governments compared to the US. They also think France, Finland, and the UK are much larger in their spending per person. This is not the case anymore, according to economist and author, John Lott. Those who oppose European style socialism do not have to wait for that system to arrive in the US. Lott warns that type of government has already arrived.

Most Americans are probably not surprised that US spending is higher than other countries, but when you factor in cost of living and total population, our budgets "are much lower" than other countries, it is often perceived. In reality, government spending accounts for more real resources per capita than "95 percent of the countries in the world," according to Lott. In fact, only "166 out of 175" countries have smaller real budgets than the US, according to Lott.

The numbers, when it comes to government spending, are frightening. The US government spends 276 percent more than is spent by the average government of another country around the world. This type of spending amounts to about $17,400 per person living in the United States or $70,000 for a family of four.

The one country that is most famous for its "welfare state" is Sweden, yet it only spends about 8.6 percent more per capita than the US. This figure is far less than most Americans would likely assume. How about France? Americans seem to enjoy making fun of France's fame for government dependency. The bad news for Americans is that France spends virtually the same amount as the United States. The difference between the US and France is a mere 1.6 percent when it comes to spending.

It gets worse from here. Finland actually spends 6 percent less than the US and countries such as Germany, Italy, and the United Kingdom do not even compare. Meanwhile, Canada spends 14 percent less than the US per capita and Japan's spending is a fraction of the United State, standing at 32 percent less. What is interesting is that this current fiscal state is before the costs of President's Obama's trillion dollar health care bill was signed into law. After the impact of that law is fully felt, the US could easily find itself close to number one in the "cradle-to-grave" socialism department, compared to its European friends.

The US government has more control of its nation's resources, per capita, than virtually all the other countries in the world This government determines an entire nation's financial future and controls from whom money comes from, who gets that money, and, ultimately, how that money is spent. Lott also points out that "Of course, the money also pays for the enforcement of all the regulations and laws that tell us what to do." The old saying that "the government is out of control" may no longer hold true. Government is in total control of virtually every aspect of our lives and economic freedom is held in very low regard.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

"Morning in America" Replaced by "Nightmare on Main Street"

In 1980 and through out his two terms in office, the theme of the Reagan Administration was "Morning in America" and it could not be more accurate. I think back to the late 1970s when I was a teenager growing up under Jimmy Carter. In the late 1970s more countries had fallen to Communism than at any time since immediately after World War II. So called “unaligned” countries, particularly in Africa and South America fell under the grips of Communism. On the economic front, Americans were facing multiple demons: double digit inflation, double digit unemployment, and double digit interest rates. When Communist tyrants invaded Afghanistan, the US response was to not play games with the Soviets in the Olympics, a choice that punished our athletes and the untold number of Americans who would love to see them compete. Carter would try to make us feel better about our plight by doing fireside chats wearing a sweater (his subtle way of reminding us there was an energy crisis as well) and spending his time blaming Americans for our various problems. The crisis, we were told, was “a malaise” that had become rampant among the American people. Americans had become depressed and needed to believe in themselves again in order to be great again.

Ronald Reagan brought significant change to the American landscape. On the domestic front, Americans had been plagued by a welfare state that expanded under the Johnson Administration a couple of decades before. Those who did not want to work, did not have to. Government was entitled to as much of the public's money as it deemed necessary. Paying excessive taxes was considered "patriotic" and complaining about them was un-American. Democrats at this time enjoyed the jovial position of being the Santa Claus of the Welfare State and Republicans were relegated to being the scrooges financing government programs. It was no surprise that the Republican Party had been the minority party since 1932.

Ronald Reagan said to work was noble and to not work was a disgrace if one was able. Ronald Reagan declared that the government was taking the people's money and that is was the Congress, not the American people, that needed to be held accountable. His massive tax cuts in 1981 led to the longest period of prosperity since the booming 1920s. More importantly, Reagan changed the way people thought about government and became to believe that monies kept in the hands of the public was always better than money in the hands of government. In no time Republicans became the party of defenders of the taxpayer and Democrats became seen as thieves for those unwilling to work for themselves. In 1980 more than 30% described themselves as “card carrying Democrats.” By the end of the Reagan Administration, this number was down to single digits. Reagan changed America’s political demographics more than any person with the exception of Franklin Roosevelt or Abraham Lincoln.

Today, "Morning in America" almost seems like ancient history. Instead we are facing a "Nightmare on Main Street." Barack Obama is socializing medicine, destroying the energy industry, spreading a cancer through out the banking industry, destroying incentives for those who work, and is increasing entitlements for those who will not work. He is raising taxes on those who make $250,000 a year and more, as well as on those who drive cars, smoke cigarettes, use health care, have a job, or use money (thanks to his inflationary policies).

The Obama Administration promises to create a situation very similar to the one that catapulted Reagan into the White House. Even today, friends of liberty are wondering who could help fill the void. The challenge for us is to end the nightmare and usher a new era of prosperity and freedom that we have not seen in years. The time to begin that process is now.

Kevin Price is Host of the Price of Business, the longest running show on CNN 650 (M-F at 11 am), AOL Radio, and CBS Radio. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com.

Are Democrats Declaring Capitalism Dead?

This is one of those posts that are very hard to write. It is the kind of thing that I would prefer to "rant" about rather than approach with calm, because the situation really is quite upsetting. Things that is so important to our culture, our history, and our affluence is being declared dead by members of the Democratic Party. Free enterprise, limited government, and private property are being treated like old and dead ideas. Democrats see them as concepts that didn't work and should be swept away.

In the early 1990s I traveled several times to Eastern Europe and the former Soviet Union conducting seminars on how to convert their economies to free markets while I was a Fellow with the American Economic Foundation. Today, all of the economies in the countries I addressed with the exception of Belarus have lower tax rates than the United States today. It appears our universities and political leaders need similar seminars in our country.

Governor David Paterson of New York told Fox News today that it is time to begin the public works programs similar to what we had under Franklin Roosevelt. He joins numerous Congressional Democrats making similar proclamations. In a candid encounter with a man on the streets, Presidential candidate Barack Obama said that he believes that "spreading the wealth" is a "good thing."

Historically, the purpose for taxes is to pay for those programs that were designed to be beneficial to all and provided special privileges for none. During the Great Depression, the idea of helping those due to extraordinary circumstances came into practice after early attempts by the Supreme Court to stop such policies, failed (Roosevelt out lived enough members of the Court and appointed those with a similar worldview to take their place and the majority). This was soon followed in the 1960s by a "War on Poverty" that became more like an assault on the poor that led to an increase of economic despair annually until the policies began to be reversed in the 1990s (which has led to a reduction in poverty). We are right back at the point of going back to the government creating a paternal relationship with its citizens. Are we like sheep? You bet!

Irresponsible organizations like ACORN fund individuals that include Sen. Barack Obama, who in turn "organized" his "community" to pressure local banks to back loans that lead to our subprime crisis. As a result of the efforts of people like Obama, the unaccountable banks gave more money to his campaigns than any member in the history of the Senate with the exception of the Banking Committee Chairman, Chris Dodd. Obama leads the effort to undermine the fundamentals of our financial system and he will be rewarded with the highest office in the land. People are "entitled" to home loans we are told, let the standards that keep banks operating healthy be disregarded. Now we are being told to bailout the banks that have taken such a route.

This massive push towards socialism isn't entirely the Democrats fault. In fact, John McCain has done an excellent Democrat impersonation by saying he wants some of the $800 billion to go directly to home builders who are struggling so they can pay off their loans. Let's reward those who bit off more than they can chew, he argues, but there will be no benefit to those who had adjustable rate mortgages and figured out how to maintain their obligations. Talk about moral hazard!

Republicans aren't losing the election today because voters have denounced free enterprise, it is because they can't find a serious candidate that is promoting such. Republicans have done a terrible job of defending economic freedom since Ronald Reagan and voters are lost as to where they can find those who will support economic liberties. I have said for a long time that if Republicans are going to act like Democrats, you might as well vote for the genuine article. Republicans need to get prepared for that probability as we approach the election.

Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Libertarians Choose to Help Democrats

The Libertarian race for President has been one of the most contentious that the party has seen in years. Maybe even decades. Eight candidates contended until this weekend, with a final ballot tonight going to former Congressman Bob Barr. The one time Republican Congressman from Georgia was a traditional Conservative for many years in most respects. Fiscal issues, the war in Iraq, and the Republican party's perceived tightening on personal freedoms (e.g., the Patriot Act) "forced" Barr to change parties.

Other contenders included an individual who had recently been pursuing the Democrat's nomination for President. Former US Senator from Alaska, Mike Gravel was eliminated after four of six ballots. In many respects, Gravel was as traditional of a Democrat as Barr was a republican. The only areas Gravel and Barr have in common are the war and civil liberty issues.

It is assumed that a Barr candidacy would harm Republicans more and Gravel would have been a distraction to the Democrats. Maybe the Libertarians believe the Democrats have enough problems with Ralph Nader and wanted to give them a break. More likely it is that Republicans today are more ideologically similar to Libertarians.

Here is a quick break down of where Barr stands:

* The complete elimination of the Income Tax and the repeal of the 16th Amendment to the Constitution that authorizes it.

* In a twist away from traditional Libertarian policies, Barr strongly emphasizes the securing of the borders. His website doesn't detail how he would accomplish such, but Libertarians have traditionally said that you simply have to eliminate the Welfare State that attracts the wrong people to this country. Other wise, immigration is an economic positive. Barr implies a slightly more proactive position.

* Regarding national defense, Barr argues that the US military is used as "Soldiers of Fortune," charged to make sure oil continues to flow to meet our economic needs. He ascribes to a Jeffersonian view of "no entangling alliances."

Will Barr matter? It is too early to say, but I am sure Republicans are anxious about keeping every single potential vote in November.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.