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Opinion
Gary Shilling

Big Government Is Bad for Productivity

Many citizens will no doubt find handouts more attractive than gainful employment.

Workers may become less productive.

Workers may become less productive.

Photographer: Spencer Platt/Getty Images

The coronavirus pandemic and its devastating effect on the U.S. economy has ensured that big government—the one that’s already spending some $4.7 trillion in the current fiscal year—is poised to get even larger. As in past crises that led to massive government interventions, new initiatives will largely stay in place once the business downturn ends to the long-term detriment of the economy, despite the “temporary” intentions of these programs.

Ronald Reagan once likened a government program to “the nearest thing to eternal life we’ll ever see on this earth.” A look at history suggests that once a new program or a new agency is established, with few exceptions, it stays established, regardless of whether it was intended to be temporary, whether it’s still needed and whether it actually solved the problem it was created to address.