Prime Minister, you cannot carry on forever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt. – Daniel Hannan (Devalued Prime Minister speech)
In Australia our eco-friendly government has massively increased the size of the public service, much of it in the area of environmental authoritarianism. They are forever banging on about ‘sustainability’ and the need for studies to be done on the issue. There has never been an inquiry though on whether the size of the government we have, is in itself sustainable.
Wes Benedict, the Executive Director of the Libertarian National Committee has raised the issue in reference to the S&P downgrade:
I'm sure you have heard the news about the Standard & Poor's downgrade of the U.S. government's credit rating.
I'm not a finance expert, so I don't know exactly how important the downgrade itself is. I think it's one more sign of what Libertarians have known for a long time: the Democrats and Republicans have created a giant welfare-warfare state that is beginning to collapse under its own weight. And I see no sign that they are going to change their behavior.
However, I think it's important to remember that these politicians aren't operating in a vacuum -- they're elected (and re-elected) by the people. And I believe that, by and large, they're giving the voters what they want: lots and lots of government benefits, regulations, and programs.
Even the Tea Party groups claim to demand spending cuts, but polls show a large majority of Tea Party supporters oppose cuts to Social Security, or Medicare, or the military.
As a Libertarian, I'd like to believe that most Americans are libertarian at heart, and only vote for big-government politicians because they think there's no alternative. However, I have to admit that most Americans just aren't there yet. They still think government is the answer (even if they won't always admit it). For example, I'm dismayed by how frequently local bond measures pass, putting local governments further into debt. Those measures seem to pass whether local politics are dominated by Democrats or Republicans.
I believe that part of our goal, as a party is to change the hearts and minds of Americans with reason, eloquence, and evidence. We need to deliver the message that statism is not only wrong, it's also unsustainable. The S&P downgrade gives us one more piece of evidence.
As long as Americans keep voting liberals and conservatives back into office, this decline will continue.