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A voting booth in Ohio.

OVER the 40 years preceding Barack Obama’s first term in office, under Republican and Democratic presidents alike, the federal government claimed, on average, about 18 percent of America’s gross domestic product in taxes every year and spent slightly under 21 percent.

Readers’ Comments

This equilibrium was always going to be threatened by the retirement of the baby boomers. But the financial crash and the Great Recession upset it sooner than anyone expected. As the economy cratered, so did tax revenue, dropping below 15 percent of G.D.P. in 2009. Government spending, meanwhile, climbed to 25 percent of G.D.P., as the president’s stimulus bill tried to help fill the gap left by the private sector’s collapse.

This gulf between taxes and spending has closed, somewhat, in the three years since, thanks to the limping recovery and some halting attempts at deficit reduction in Washington. But a new equilibrium will take many more years of growth and many more painful policy decisions to achieve.

The choice voters face on Tuesday will not determine exactly where this new equilibrium ends up. An Obama second term and a Romney first term would both feature a certain amount of can-kicking and a certain amount of compromise. A President Obama would probably accede to further spending cuts; a President Romney would likely accept the need for slightly higher tax revenue. Both men would continue to run large deficits as long as the recovery seemed weak.

But this year’s choice will make a long-term difference nonetheless. A vote for President Obama is a vote for a future where spending stabilizes well above its 40-year average, and where tax revenue gradually rises — thanks to the leverage afforded the president by the expiration of the Bush tax cuts — to pay for Social Security, Medicare, the president’ health care law and more.

A vote for Romney, on the other hand, is a vote for a future in which we at least try to make the fiscal adjustments necessary to keep taxing and spending at roughly the same rate as under Ronald Reagan and Bill Clinton and George W. Bush.

As I’ve written before, there are good reasons that a nonideological voter might be undecided between these two futures. The conservative vision requires making structural changes to popular programs, and asking the middle class to accept further creative destruction in an age of insecurity. The last 50 years of Western European life, meanwhile, suggest that the higher-tax, higher-spending equilibrium favored by liberals can be comfortable rather than dystopian.

But there’s a strong rebuttal to the case for accepting a bigger-government new normal.

The European model of social democracy has its virtues, but it has always depended on the wealth created by American laissez-faire. As a recent economic paper entitled “Can’t We All Be More Like Scandinavians?” points out, it’s easier for smaller countries to afford a more “cuddly” form of capitalism if big countries like the United States are driving global economic growth. And the price of a permanently larger government — in growth lost, private-sector jobs left uncreated, breakthroughs forgone — is much higher for a country of our size and influence than it is for a Sweden or a France.

What’s more, we would be paying this increased price at a very different demographic and economic moment than when the European welfare states were built, or for that matter when our own entitlement system was established.

It’s one thing for a young, fast-growing nation — like the America of the 1960s — to embrace a permanently larger public sector. It’s quite another for a graying society with a stagnant economy and a sinking birthrate to do the same. There’s a risk of a vicious cycle, in which a shrinking working-age population bears the burden of growing old-age entitlements, which in turn discourages precisely the kind of risk-taking and family formation required to keep the system solvent.

Already our government redistributes too much from the young to the old, from working families to retirees, from productive entrepreneurs to protected clients. To accede to this government’s permanent expansion is to walk, with eyes wide open, into the kind of economic and demographic trap that has ensnared the weaker economies of Europe today.

President Obama did not single-handedly put us on this path. But he has kept us on it, accelerated our progress down it, and campaigned for re-election as though taking this course had no downsides whatsoever. He’s the candidate of the Medicare status quo in a country facing an entitlement crunch, of government bailouts in an economy with a crony capitalism problem, and of contraceptive mandates in a society with a birth dearth.

For an incumbent president facing a mistrusted opposition party, this may prove a formula for a narrow electoral victory. But for the country that might vote to re-elect him, it risks four more years of drift, stagnation and decline.

18 Comments

Readers shared their thoughts on this article.

1. 

   • Prof.Jai Prakash Sharma,
   • Jaipur, India
   • Verified

   Rather, by ending the Bush-era tax cuts, and trimming the defense spending, not only the wiser than earlier second term Obama presidency could easily plug the budgetary gaps, but by undertaking the impending tax-code reforms, and a creative mobilisation of revenue, it could find enough resources for productive deployment in the economy. While, being soft to, rather beholden to special interests, neither Romney would dare ever taxing the super rich, nor lessen defense spending, which might culminate into another fiscal collapse and indebtedness. The voters have come to sense this, hence there’s no question of choosing between Obama and Romney, as the majority of them seem to have perhaps already decided which way to go, that is the only feasible way being shown by Obama.

   • Nov. 4, 2012 at 12:47 a.m.
   • Recommended14
2. 

   • Matthew Carnicelli
   • Brooklyn, New York
   • Verified

   “He’s the candidate of the Medicare status quo in a country facing an entitlement crunch, of government bailouts in an economy with a crony capitalism problem, and of contraceptive mandates in a society with a birth dearth.”

   Ross, America’s population grows larger every year – through immigration. Every time I hear a conservative make this point about a birth dearth, I get this sense that what they’re really lamenting is a dearth of white babies. Given the fact that our population grows every year, I simply cannot interpret this statement any other way.

   And Mitt Romney is the candidate of summer patriots who endlessly tell us how much they love America, yet shelter their income in the Cayman Islands and Switzerland. If only their mouths resided in the same country as their money.

   And Romney is also the candidate who wants to leave his grandchildren an ecological nightmare, a nightmare that he could have helped ameliorate by forcing denial-based GOP audiences to accept stubborn facts, instead of mocking a more serious man attempting to do something about this looming crisis before it was too late. You know, for this wailing on the right about the mess we’re allegedly leaving our children and our grandchildren, we now know what a mess looks like – and it looks like New Orleans after Katrina, and the East coast after Sandy.

   But you see, Ross, Romney is a dishonest, shallow, greedy man – not a serious one. America needs a serious man as president, not a con man.

   • Nov. 4, 2012 at 12:34 a.m.
   • Recommended76
3. 

   • Rita
   • California
   • Verified

   Mr. Douthat asserts that a vote for Mr. Romney means a future “where we at least try to make the fiscal adjustments…”. But Mr. Romney has not told us, in any detail, what those fiscal adjustments will be and how they will improve the economy. He evades providing details because he fears that he will lose part of his base and because he knows that what he has been peddling will not work. If the best argument for Mr. Romney is that he might try to make fiscal adjustments, then the case for Mr. Romney has not been made. When a candidate offers little or no details or shifts the details (e.g. limiting deductions to $17,000, $25,000 or whatever Congress says), this is a candidate who is asking us to make a leap of faith in voting for him and trust him. But who do you trust, the liberal-leaning governor of Massachusetts, the ruthless financier at Bain Capital, the severe conservative of the primaries or the genial centrist of the last month? Mr. Romney has failed to make the case for his election and Mr. Douthat cannot make up for Mr. Romney’s failures.

   • Nov. 4, 2012 at 12:05 a.m.
   • Recommended60
4. 

   • Donald Seekins
   • Waipahu HI
   • Verified

   One of the most effective ways we can reduce government spending and deficits is by junking our private sector-based health insurance system and establishing Medicare for all. A single-payer system would be far more efficient and effective than either the horrendous status quo or the reforms established by the President’s Affordable Care Act. To the question “why can’t we be like Sweden?” (or Canada, or Japan, or Britain), I say “we can” and the sooner we do it, the better off we will be.

   • Nov. 3, 2012 at 11:57 p.m.
   • Recommended72
5. 

   • Paul ’52
   • New York, NY
   • Verified

   RedIstribution? The great redistribution has been the shift in about 15% of our nation’s income to the 1% already at the top over the last 30 years. This shift dwarfs every item you discuss under the “redistribution” mantra, yet you totally fail to address it.

   The plain fact is that as long as 1% of us make as much s 50% of us, vast numbers of us won’t have enough for basics, thus a larger government will be guaranteed, and some of the great redistribution of the last 30 years will have to be taxed away from the top for these purposes.

   Want smaller government? Start with a fairer society.

   • Nov. 3, 2012 at 11:16 p.m.
   • Recommended92
6. 

   • Bryan Barrett
   • Malvern, Pa.
   • Verified

   Following the Presidential election the order of business will be very much in the hands of Congress and whoever occupies The White House will have to learn to negotiate the future course of our country for the benefit of the nation by working closely with Congress. President Obama, while blaming Congress for his lack of success has proved time and again that he does not like that process.

   Governor Romney has a proven record of getting the job done with a State Government which was 87% Democrat. They did have their rocky moments and not every one loved each other. But the gridlock which has characterized DC since the 2010 mid term election, was avoided because negotiations were respectful, ongoing and successful.

   The question for the voters must be; do we want to continue with the abysmal record of the past four years, and no progress toward renewing the country, or depend on the failures of the Obama administration being magically transformed into a shining success story that has been missing until now. We simply cannot wait any longer, Ross, it is time to make the change.

   Nate Silver sees the contest as a tie and points out that for it to break for President Obama all the possible good, and even perfect things, would have to happen in every state. He says that gives him sleepless nights.

   The choice is simple and the time to change direction is on Tuesday November 6th. Forget the derision heaped upon Governor Romney, he is an able and decent man. And he is a leader.

   • Nov. 3, 2012 at 10:47 p.m.
   • Recommended5

   1. 

      • Paul ’52
      • New York, NY
      • Verified

      You know that Romney forgot to tell you that he was the fourth Republican governor in a row in Massachusetts? And he was so successful that he didn’t run for reelection, and will lose that state by about 25 points.

      The sole reason why no republican house members cooperated with Obama is that the republican caucus decided that it would refuse to cooperate with Obama. It did so on the day he was inaugurated, so even where he made proposals based on their prior ideas, like their health plan from 1993, they refused to deal. This, in the midst of the worst domestic economic crisis in 80 years.

      One can only hope that America will not reward traitorous behavior.

      • Nov. 3, 2012 at 11:26 p.m.
      • Recommended103
   2. 

      • Rita
      • California
      • Verified

      Gov. Christie and Pres. Obama have shown us that where both sides have the will to put the good of the country ahead of the party, there will be bi-partisanship and good can be accomplished. The question for voters id whether or not we want to reward those who put party before country. While no one would mistake Pres. Obama for LBJ, who was a legendary arm-twister, it is hard to forget and hold innocent the partisans who walked away from the negotiating table more than once, who played brinksmanship with the nation’s credit-rating and whose idea of negotiating is “No Compromise”.

      • Nov. 3, 2012 at 11:31 p.m.
      • Recommended61
7. 

   • Mark Thomason
   • Clawson, MI
   • Verified

   Big government as the new normal was decided in 1936. You lost.

   If spending and income were kept at the levels you suggest, they would have to go up. Reagan tax rates were much higher.

   The redistribution has been from poor to wealthy for many years, and we are now well settled into a New Gilded Age. You call to do more of that, to cut off the poorest even more, is the problem not the solution.

   • Nov. 3, 2012 at 10:40 p.m.
   • Recommended88
8. 

   • Rima Regas
   • Mission Viejo, CA
   • Verified

   Ross, I highly recommend you spend time with your colleague, Timothy Egan. You need a philosopher in your life to change the very stale ideas that keep you running in circles.

   You write: “a President Romney would likely accept the need for slightly higher tax revenue. Both men would continue to run large deficits as long as the recovery seemed weak.”

   Romney is bankrolled by the oligarchs. He is a third-rate oligarch, just based on the money he has, when compared to, say, a Walton or a Koch. Do you think they put out as much cash as they did to allow him to sign off on slightly higher taxes? Grover Norquist most famously said “all we need is a president with enough digits to sign bills.” He meant it. The Kochs mean it. So do all the others hiding in the shadows behind them.

   Given majorities in both houses, you can bet your bottom dollar that President Obama won’t make the same mistake the second time around. That’s not how he rolls. Oh, and in case you hadn’t noticed, he doesn’t forget and sure knows how to keep a grudge on low heat and settle a score when the time is just right.

   Romney’s got nothing on Obama. Zip. Nada.

   • Nov. 3, 2012 at 10:01 p.m.
   • Recommended146
9. 

   • Clyde Wynant
   • Pittsburgh, PA, USA
   • Verified

   OK. It’s late and I’m tired, but isn’t this one of the most obtuse opinion pieces of the current political cycle?

   My response is simply this; if we are stagnant, it is not because we’ve become some sort of faux Scandinavian social democracy, but because our own “captains of industry” have done everything in their power to scuttle any recovery.

   • Nov. 3, 2012 at 9:03 p.m.
   • Recommended216
10. 

    • tom mcmahon
    • millis ma
    • Verified

    Conservatives lie, do so without reservation, on a regular basis. We hear BIG Gov’t decried all the time, yet the ratio of gov’t worker to general population is realitively unchanged over the last fifty years. We are a country of over 310 million, fifty states, some wealthier than others. Yet as the conservatives see it, everything is gov’t fault.
    Those southern tier states red in color,religious in backround,,lead in undereducated, poverty stricken populations. Are we to believe the conservatives know how to govern? For if this is their example of how they do it, They are complete failures. Progressive states lead in education, healthcare, lower poverty rates, proving larger effective gov’t is the answer or at least part of it. Liars, lies and those they tell, for truth, is a foreign to them as Blue Spruce Trees are to Tahiti.

    • Nov. 3, 2012 at 7:50 p.m.
    • Recommended174
11. 

    • Richard
    • Bozeman, MT
    • Verified

    “It’s easier for smaller countries to afford a more “cuddly” form of capitalism if big countries like the United States are driving global economic growth.” What is even easier would be to cut the massive burden of our military expenditures. This would free up funds for a more humane form of capitalism. I fear Douthat was never cuddled, not even once.

    • Nov. 3, 2012 at 7:43 p.m.
    • Recommended130
12. 

    • trk
    • plano,tx
    • Verified

    ‘A vote for Romney, on the other hand, is a vote for a future in which we at least try to make the fiscal adjustments necessary to keep taxing and spending at roughly the same rate as under Ronald Reagan and Bill Clinton and George W. Bush.’

    And just what planet are you on Douthat? All that Romney wants to do is to reduce the tax rate for the wealthy and undoubtedly under the influence of lobbyists (his pals) increase the taxes on everyone else. That is the GOP and apparently your mantra.

    • Nov. 3, 2012 at 7:39 p.m.
    • Recommended187
13. 

    • Diana Moses
    • Arlington, MA
    • Verified

    “[C]ontraceptive mandates”? Who’s being forced to use contraceptives? There’s a difference between requiring available access to contraception through insurance coverage and mandating its use — let’s not try to fudge the difference. And if we’re worried about lower birth rates, we should pay attention to encouraging employers to hire full-time employees at wages at which they can support a family with children, it seems to me.

    • Nov. 3, 2012 at 6:54 p.m.
    • Recommended230
14. 

    • Mary Scott
    • NY
    • Verified

    When Bill Clinton left office tax revenue was about 21% of GDP and spending a little less – that’s how we ended up with a surplus. By the time George Bush got through with us, tax revenues plunged and deficits exploded. In fact, this was true even before the 2008 economic collapse.

    It would be wise to go back to many of the Clinton tax policies if we want to reduce the deficit but any suggestion that we return to the Reagan or Bush economic policies seems foolhardy, at best – the former tripled the debt and the latter nearly doubled it.

    Personally, I am voting for President Obama primarily because I am convinced that Romney/Ryan policies would eviscerate our social safety net and women’s reproductive rights but for undecided voters most concerned about our debt, the best choice is also President Obama, in my opinion.

    History shows that Republicans seem to worry most about debt when they don’t control the presidency. Once they regain the office, they quickly revert back to their “deficits don’t matter” mentality so they can provide even greater tax cuts to our wealthiest citizens. Revenue decines and debt balloons.

    • Nov. 3, 2012 at 6:30 p.m.
    • Recommended268
15. 

    • Karen Garcia
    • New Paltz, NY
    • Verified

    At the same time you envision ravening hordes of zombie grandmas eating their own young, you worry that not enough granny food is getting born due to some nefarious forced government contraception program.

    Birth dearth? How about just coming back to Earth? The atmosphere in whatever conservative constellation you’re floating around in is toxic, that’s for sure. The Beltway chattering class all seem to have inhaled the same weird gas which makes them falsely claim that Social Security is driving the debt and the deficit.

    Earth to Ross: Social Security is a retirement program funded by payroll contributions from workers and employers. It has not contributed one penny to the deficit. It should not be part of any Grand Bargain of deficit reduction.

    Judging from all the gaseous moaning and groaning in Right Wing World, there must have been a massive overdose on Entitlement Crunchies this Halloween. But here’s the perfect antidote to your Nightmare on Geezer Street, Ross: Single payer universal health care! Medicare for All, and All for Medicare.

    • Nov. 3, 2012 at 4:58 p.m.
    • Recommended261
16. 

    • Ross Williams
    • Grand Rapids, Minnesota
    • Verified

    “Government spending, meanwhile, climbed to 25 percent of G.D.P.”

    Lets try to be clear. This is a claim for federal spending, not “Government spending”. In fact if includes federal “spending” that was actually income transfers to local and state government.

    Moreover, the amount of money that flows through government has little to do with its actual impact. Its HOW the money was spent, not HOW MUCH, that is the critical issue. But that is way too complicated for a media story.

    • Nov. 3, 2012 at 4:24 p.m.
    • Recommended97