In 1996, President Bill Clinton famously said in his State of the Union speech addressing both Houses of Congress, “The era of big government is over.” He was responding to a shellacking that the Democrat party had taken in the 1994 election when the Republicans had run a disciplined campaign to cut taxes, regulation, and spending, the three legs of modern government.
What followed was remarkable. In 1998, the US government recorded its first-ever budget surplus ($69.3 billion) since 1970. Aided by a booming economy and no wars in any theatre, 1999’s numbers were even better ($125.6 billion budget surplus), topping at a $236 billion surplus in 2000, the highest ever recorded in history. Then, the surplus fell to $128.2 billion in 2001, when 9/11 happened.
Countries around the world followed the US lead during this period. Western Europe was busy launching the Eurozone with strict limits on how much member-states could spend on deficits — a limit that certain countries like Italy, Greece, Ireland, and Spain routinely flouted later. India’s economy was a capitalist’s dream, so laissez-faire that small-government fans salivated.
Massive budget deficit this year
The US government has never balanced its budget since 2001 and big government is back with a vengeance. To fight Covid-19, the government will realise a budget deficit this year of over $4.5 trillion, nearly 20 per cent of GDP, the highest since World War II.
The government is sending stimulus payments of $1,200 per person for anyone who filed income taxes on up to $150,000 in income. The unemployment insurance program has been so generously backstopped that nearly 30 million unemployed will now get a check of $1,000 a week for up to 39 weeks, in many cases earning more money sitting at home than while employed.
Small businesses were allowed to apply for $350 billion in loans, all of which would be forgiven if 75 per cent of the money was used to pay employees to stay at home. The money ran out within a week and Congress passed another Bill, this time nearing $500 billion more. There’s free money for hospitals, airline companies, subway systems, restaurants, and hotels. When you can print money and distribute it, the sky's the limit. Small government titans such as Ronald Reagan and Milton Friedman would be sobbing in their graves.
Every country is doing the same and spending money that it doesn’t have. India’s government doesn’t have the same luxury as the US, and has so far announced additional spending of only about 1 per cent of GDP. But it is resorting to creative measures to effect cash transfers to an entire population under the most stringent lockdown in the world. Employers have been ordered to pay employees for three months even when there’s no output and are being permitted to tap into the Employees' State Insurance reserves for up to 70 per cent of compensation. Banks have been ordered not to go after lenders for three months of missed mortgage payments and in return, renters have been granted a moratorium from paying rent for three months.
Morphing into a police state
But big government has not returned just because of big spending. It is more that the actions of big government are worrisome. Even under the best of conditions, common citizens rarely interact with the myriad departments of government and are mostly unaware of how large bureaucracies really are. There is one exception: the Home Ministry or the Ministry for Internal Affairs, or the Ministry responsible for matters of homeland security always touches people’s lives. In West Asia — Iraq, Syria, Iran, Saudi Arabia, Qatar, Egypt — residents continue to be terrified of the police state. Present both in uniform and plain-clothes at practically every street corner, police officers watch and observe citizens as they go about their daily lives, detaining violators and punishing them on the spot for minor infractions, or imprisoning them for major offences, often without due process.
During the Cold War, the Deutsche Volkspolizei, commonly known as the VoPo, was East Germany’s national police organisation. The USSR’s NKVD controlled populations across nine time zones with brutal force. Even today, the People's Armed Police Force (abbreviated: PAP) monitors every aspect of daily life in China.
The Covid crisis has created an excuse for the world’s most liberal democracies to engage in versions of martial subservience that they habitually criticized in more authoritarian regimes. Michigan’s governor has passed such stringent emergency orders for people to shelter in place — including restrictions preventing a homeowner from visiting his second home even if both homes are in rural Michigan untouched by the virus — that citizens brought their protests to the capital, Lansing. The mayor of Chicago announced that people violating stay-at-home orders would be issued a citation and could be put in jail. The New York mayor has said that people not wearing face masks would be fined. The mayor of Los Angeles had crews fill up sand pits on the city’s famed beaches so that children could not play.
In an era when even the Kingdom of Saudi Arabia recently abolished the practice of public flogging, India's police forces are warmly employing whiplashing as a means to curb unauthorised movement. The country’s elites, on social media, applaud such draconian police action asserting that violators deserve such treatment. As a whiplash survivor myself forty years ago when I was beaten by a police lathi simply for coming down the steps of the then KSCA cricket stadium outside which a brawl had started, I refuse to condone the practice, no matter how laudable the goal is.
Illogical one-size-fits-all rules
Big government actions the world over have been mostly spontaneous and have generally employed a one-size-fits-all-approach. The population density of New York City is 27,000 per square mile and New Yorkers are used to crowded subways, buses, and city plazas. In North Texas, the density is 700 per square miles, where public transportation is non-existent. People commute in their cars to work or a store, and as long as they can maintain social distancing, they are at little risk of contracting the disease or spreading it. How can a reasonable person support the same restrictions of crowded New York City in sparsely-populated Texas?
No government leader wants to be criticised for inaction, so any action, as long as it is clear and enforced, and promoted using friendly media outlets, raises the faith of the citizenry. In the meantime, as data from scientists and doctors come out, one wonders if extreme measures to shut economies down for vast areas of populations — forcing people to choose between lives or livelihoods — have been worth it.
Look carefully at the data
So what does the data say? America has had over a million cases and nearly 39,000 dead, many of them in New York City. But a study of 5,700 patients from the highly-respected American Medical Association, for cases from March 1 through April 4, shows that nearly all NYC patients had at least one chronic health issue, such as hypertension, obesity, and diabetes, with 88 per cent having at least two pre-existing health conditions. Only 6 per cent had no issues at all.
Besides, the median age of patients in the AMA study was 63, which means half the patients were older than 63. The virus doesn’t discriminate between rich and poor, or citizens of one country from another. Older people who are more infirm and have immune systems that are not as strong are a lot more vulnerable to the virus.
The Washington Post analysed state-by-state data and found that for the very young — people under the age of 20 — death is extremely rare in the current pandemic. The risk appears to rise with every decade of age: 45 deaths among people in their 20s, 190 deaths among people in their 30s, and at least 413 deaths among people in their 40s. In other words, there were 648 deaths out of a total number of 12,516 deaths at the time of the Post ’s reporting, a 5 per cent death rate of all people under 50.
These facts — that is, if you’re young and healthy, you’re unlikely to get the disease, and even if you do, you’re likely to beat it fairly easily with minimal medical intervention — tend to weaken the arguments of government leaders who want to exercise a tight grip on populations. So, government-friendly media outlets don’t give these truths the same airtime as government propaganda.
Nearly 45 per cent of India’s population is under 24 — and if US numbers can translate, this would amount to a death rate of 0.3 per cent, an extremely small number. India’s hot weather and decades of herd immunity, developed from living in densely populated areas, often in not so sanitary conditions, will likely drive down the risk even more. Yet it is these youngsters who are being largely targeted by the police for strict enforcement of quarantines. The police have been told by their bosses to restrict any and all movement. And they’re glad to enforce the restrictions because power corrupts the average policeman’s mind.
Strange times
A relative called me yesterday from Bengaluru for instructions to download the Aarogya Setu app. She insisted that repeated announcements on TV said that it was compulsory to have it up and running. I said, unable to contain the resistance from the small-government DNA that permeates every cell of my body, “How can the government force you to install an app? What if people don’t have smartphones or not have sufficient memory in their phones? What if people don’t know how to use the app? What happens when someone uses the app, doesn’t understand the information provided and acts incorrectly? Would they be arrested?”
She was unimpressed by my native resistance to big government. Her response was fully deferential to the Prime Minister. “He is doing the best he can to help save the country. India has never had such a hard-working, dedicated, selfless leader in my lifetime. And you’re questioning his motives?”
Sitting 9,000 miles away, I sighed, signed her up for the app, and told her how to set it up. She got it to work in a few minutes and texted me promptly, in sheer delight. She was proud to be one more loyal volunteer in the huge army commissioned by the PM.
We sure live in strange times.