Freedomnomics

Article published Thursday, April 8, 2010, at Fox News.

Our Bloated Goverment Is Already Much, Much Bigger Than You Think

Think governments of countries with a genuine "welfare state" spend more per capita than the United States? Think again.

By John R. Lott, Jr.

How much money does it take for governments of sovereign nations to do their job? Different countries obviously have different answers. Countries run by social democratic or socialist parties will spend lavishly on cradle-to-grave social systems. On the other hand, citizens in non-socialist countries have more choice over how to spend their money. When Americans think of countries with really big governments, they probably think of Sweden or France or Finland. Most of Europe is thought to have much larger governments than the United States.

Unfortunately, this isn't true any more. Even after adjusting for differences in the cost of living and taking into account how many people live in the country, total U.S. government spending -- at all levels of government -- accounts for more real resources per capita than 95 percent of the countries in the world. In fact, 166 out of 175 countries have governments that spend less money than the United States [click here for Table 1]. Our government spends 276 percent more than is spent by the average government of another country around the world. That comes out to about $17,400 per person living in the United States -- almost $70,000 for a family of four.

Sweden's famous “welfare state” spends only about 8.6 percent more per capita than the United States -- probably a much smaller difference than most would have guessed. France spends virtually the same amount as the U.S., just 1.6 percent more. Meanwhile, Finland spends 6 percent less. Countries such as Germany, Italy, and the U.K. don’t even come close to the U.S. And our neighbor Canada spends 14 percent less per capita than the U.S. Japan spends 32 percent less.

Two of the eight countries where governments spend more than our government likely do so because the government owns the country's oil wealth (Qatar and Norway).

Looking at government spending alone isn't a perfect way to compare countries. For example, while the Swedish government rewards parents with a check for each additional child a family has, the United States uses the tax credits and the tax code to accomplish the same goal. That would make federal government;s expenditures look relatively smaller even though the end result is the same.

Americans spend more on national defense than most other countries, but the differences in defense expenditures are relatively minor so that comparing non-defense government expenditures doesn't make that much difference. The federal government’s per capita government expenditures still exceeds that of 93 percent of other countries.

With the new trillion dollar health law signed by President Obama the U.S. total spending and rank is guaranteed to go up further.

The federal government has control over more resources per capita than virtually any other country in the world. The government decides from whom the money is taken from, who gets it, and how that money can be spent. Of course, the money also pays for the enforcement of all the regulations and laws that tell us what to do. That is a huge amount of government control over people’s lives. Think about just how much more freedom the average family of four would have if they, not the government, got to determine how that $70,000 was spent.

John R. Lott Jr. is a FOXNews.com contributor. He is an economist and the author of "More Guns, Less Crime (University of Chicago Press, 2010), the third edition will be published in May.".

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