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It’s likely to come as a surprise to many small government advocates that today the US government (local, state, and fed) is the smallest it has been in 45 years.
The Hamilton Project recently released the graph below that shows the ratio of government employees versus population.
The Hamilton Project is an economic policy initiative of the Brookings Institution, a Washington think tank.
To match the ratio we have reached today, we would have to go back to 1968 and the LBJ administration.
A large portion of the reduction has occurred due to local government layoffs or cuts. The Hamilton project estimates that the cuts have resulted in the loss of 1.7 million jobs.
When weighing the small government argument against our quest for more jobs it seems that there is a big tradeoff. The public sector does have the opportunity to provide more jobs. But if you want small government then you should be looking to the private sector to make up the difference as government downsizes.
The chart shows today’s percentage against the average from January 1980 and against the average during the Bush administration.