I see that George Will has caught wise to a point I’ve made here many times. You can’t judge the scale and reach of the federal government from the number of federal employees. There are about as many federal employees today as there were 50 years ago. However:
Since 1960, the number of state and local government employees has tripled to more than 18 million, a growth driven by federal money: Between the early 1960s and early 2010s, the inflation-adjusted value of federal grants for the states increased more than tenfold. For example, the EPA has fewer than 20,000 employees, but 90 percent of EPA programs are completely administered by thousands of state government employees, largely funded by Washington.
A quarter of the federal budget is administered by the fewer than 5,000 employees of the Centers for Medicare and Medicaid Services (CMS) — and by the states, at least half of whose administrative costs are paid by CMS. Various federal crime and homeland security bills help fund local police departments. “By conservative estimates,†DiIulio writes, “there are about 3 million state and local government workers†— about 50 percent more than the number of federal workers — “funded via federal grants and contracts.â€
Then there are for-profit contractors, used, DiIulio says, “by every federal department, bureau and agency.†For almost a decade, the Defense Department’s full-time equivalent of 700,000 to 800,000 civilian workers have been supplemented by the full-time equivalent of 620,000 to 770,000 for-profit contract employees. “During the first Gulf War in 1991,†DiIulio says, “American soldiers outnumbered private contractors in the region by about 60-to-1; but, by 2006, there were nearly as many private contractors as soldiers in Iraq — about 100,000 contract employees, not counting subcontractor employees, versus 140,000 troops.†Today, the government spends more (about $350 billion) on defense contractors than on all official federal bureaucrats ($250 billion).
Finally, “employment in the tax-exempt or independent sector more than doubled between 1977 and 2012 to more than 11 million.†Approximately a third of the revenues to nonprofits (e.g., Planned Parenthood) flow in one way or another from government. “If,†DiIulio calculates, “only one-fifth of the 11 million nonprofit sector employees owe their jobs to federal or intergovernmental grant, contract or fee funding, that’s 2.2 million workers†— slightly more than the official federal workforce.
To which add the estimated 7.5 million for-profit contractors. Plus the conservative estimate of 3 million federally funded employees of state and local governments. To this total of more than 12 million add the approximately 2 million federal employees. This 14 million is about 10 million more than the estimated 4 million federal employees and contractors during the Eisenhower administration.
So, today’s government is indeed big (3.5 times bigger than 5½ decades ago), but dispersed to disguise its size. This government is, DiIulio says, “both debt-financed and proxy-administered.â€
If anything that understates the situation. Upwards of half the entire healthcare sector—more than one sixth of the economy—is paid for by the federal government. In effect half of the millions of workers in the healthcare sector are government workers.
And that’s why the United States consistently underperforms other advanced countries.
Oh, wait, just checking some numbers here. . . Huh, it seems that by most measures the US outperforms most advanced economies, each of which has its own vast government structure. And of course all those rich countries with big governments outperform the weaker countries.
It’s almost as if a large government is a necessary part of achieving first world status. 100% of rich countries have big gubmint. Even Switzerland. Even Germany.
I think that’s basically backwards. The richer the country the more government it can afford.
I don’t oppose government as such. I do oppose waste and in particular waste that’s making some people very, very rich.
Private contractors cost a multiple of what employees would. Why aren’t there more government employees and fewer contractors? Because it gives political cover to cowardly legislators and there are people making lots and lots of money out of it which they then recycle into more political influence. I’m talking about the contractors’ bosses rather than the contractors themselves.
Couple advantages to contractors, they don’t get the costly fringe benefits of public employees (well, on paper anyway) especially pensions and secondly, being outside the civil service, there is a certain flexibility in work rules, hiring, firing etc (again on paper anyway). However, biggest advantage is that the pork barrel sure is tasty.
I know a lot of people who work as defense contractors. A couple of them run defense contracting “companies” that consist of only themselves. Most work for larger firms that do almost all their business with the federal government. Since a lot of the work, particularly in intelligence, is highly specialized with high barriers to entry, there is a small pool of qualified employees. So when a contract comes up for a new bid, the firm currently holding the contract plus a couple of others will put in bids. If a new firm wins they end up hiring almost all the people who worked for the old firm because they are the only ones with the required specialized experience. So the employees stay largely the same, but the company changes contract-to-contract. One friend left the military, got a contracting job doing almost the same thing in the same building and has been there ever since. He’s done the same job but had three different employers. The last one low-balled the bid so any employee who wanted to stay on had to take a 30% pay cut. About 1/4 of the people walked and said “no thanks.” My friend stayed but is looking for something else.
But there are advantages for the government. If the requirement goes away (for instance, let’s say we stop doing stupid land wars in Asia), then the feds just drop the contract once it’s up and there are no legacy costs to consider. There isn’t a rule, like in the civil service, that the feds have to find you a new job if they eliminate yours. Additionally, if the feds need something quickly, a contractor can get it up and running a lot quicker than the federal bureaucracy. I think I mentioned before that when I got my civil service job, it was almost an entire year from the first time I applied until I actually started. More typically it’s 6-8 months (they had to re advertise my position due to an error which caused a 3 month delay). And that doesn’t include the time it takes to create the position, write and get the position description approved, and get the actual advertisement on USAJOBS. That part can take another six months to a couple of years.
That’s all just the tip of the iceberg. It’s hard to overstate just how slow and inflexible the federal civil service is. I don’t agree with Michael that it’s a sign of strength. It’s a crazy way to run a government and it’s why government reform is one of my priorities. Unfortunately neither party shows and interest.
BTW, one reason I’m really psyched for Mattis as Secdef is because he purged the CENTCOM staff when he became Commander there. He got rid of most of the self-licking ice cream cones. I don’t recall the exact numbers, but about 2/3 of the contractors were eliminated. The CENTCOM staff was really bad, but it’s nothing compared to what is in DC.
“I think that’s basically backwards. The richer the country the more government it can afford.”
Not quite right. You need a government that is big enough and cohesive enough for a sound economy to develop. You don’t get the infrastructure you need to have a first world economy. You don’t get the basic health care you need. You don’t get the public investment in research. Perhaps at some point you can say that government is a luxury, but I don’t know where that point lies.
Steve
Having a government that’s large enough to accomplish certain ends and having a government that accomplishes those ends are two different things. In fact many developing countries have governments that are larger and with greater reach than developed countries. I agree with Andy’s implicit point that we’re in serious need of civil service reform.
We had pretty obviously reached a large enough size fifty years ago and today the reach of government is three times what it was then. The deadweight loss of government is just as real as a government that doesn’t provide the services needed for an economy to flourish.
IMO among the most important of those are a sound currency and credit system and the rule of law and stability in laws and regulations. Among the factors that are impeding them are a lack of commitment to limited government.
“Unfortunately neither party shows and interest.”
It’s about power. Always has been. It’s why the size and scope matters, not the party.
Those here extolling government’s good deeds or professing to not know how big is necessary should just ponder the economic size of US federal, state and local government vs the GDP of quite a few countries and ask, “from which is produced more?”
You wouldn’t know we have a war going on by the headlines, but we do, in Mosul, Iraq.
Are there casualties? Probably. it’s war, after all.
We never hear about deaths of private military contractors in battle, so the public isn’t up in anti-war protest. designed by no drama Obama, works as well for Trump.
Maybe it’the way it has to be done, as it’s now clear the American public has no stomach for war.
On the local level the work of private vs government workers is interesting to evaluate. Currently our community is putting in a number of handicap sidewalk ramps. A few years back, when the project was first initiated, the work was only done by city employees. They were slow, seemed disjointed in how they approached the steps of constructing these ramps, taking a long time to complete relatively few ramps.
The second phase of this project was contracted out to a private firm. The difference in energy, cohesion of the crew in the demolition of the old and building the new is literally a concert of efficiency when observing the work habits of private industry..
Basically, there is no comparison to the overall value achieved through the private sector, vs seeking something done through the bureaucracy of government.
“how big is necessary should just ponder the economic size of US federal, state and local government vs the GDP of quite a few countries and ask, “from which is produced more?—
Find me this country with “limited government” and a first world economy. Since you have, intentionally I suspect, avoided a definition, let me offer one. Find a country that spends 50% less of its GDP on government than we do that has a first world economy where you would actually want to live. Dave just said that our government was big enough 50 years ago when it was 1/3 of its current size, so I am just making it easier by only asking for a 50% reduction.
Steve