Big government is back

COVID19 should not be an excuse to bring back Big Government


By Kevin-James Fenech

Kevin is the founder and owner of JOB Search - and FENCI Consulting

In the words of Ronald Reagan: ‘As government expands, liberty contracts’.

Who would have thought that the novel coronavirus would change the political landscape in both Malta and Europe. Clearly, BIG Government is back; and with vengeance!

I am here referring to a government that is ‘excessively interventionist’ and intrudes into all aspects of ordinary life. The 21st century’s excuse for Big Government is ‘pubic health’ and sadly people all over the world seem to have accepted this new state of affairs without even whispering an objection. ‘The Road to Serfdom’ has returned.

Big Government may seem ‘welcome’ or ‘necessary’ right now, as Dr. Fear controls minds and public health scaremongering reigns supreme but once the vaccine is ready and COVID19 demoted in importance and comparable to influenza, Big Government will need to be reigned back and it won’t be easy to do so.

The facts are that COVID19 has resulted in a massive restriction of our individual freedoms, big government spending and collectivism winning over individualism. The consequence of this is our debt shooting-up to €1.1b in 6 months and eventually taxes will need to go up and what we will remain in the post-COVID19 landscape is Big Government.

So for all those people who between 2013-2017 complained about an American type of free market capitalism, low taxes and small government, be warned that we are about to enter a new era post-COVID19 which seems to indicate that BIG Government is here to stay.

The government is already controlling our lives under the guise and belief that public health requirements necessitates the suspension and curtailment of our liberties and individual freedoms. We are no longer allowed to think like individuals; to exercise our own choices and take responsibility for our own lives. The government knows best and collectivism is preferred to individualism.

The government is also embarking on one of the largest public spending exercises this country has ever seen; it is also changing the size and scope of government intervention. I therefore feel that we are suspending free market economics and opting for big government all because of the excuse of public health.

I never thought COVID19 could have such a socio-economic and socio-political impact! I always assumed that small government, low taxes and individual liberty were untouchable (as they were pre-COVID19) but 2020 is a watershed moment! Let’s tread carefully or live to regret it.

So what’s wrong with Big Government?

It crowds out the private sector and undermines competitiveness; The economy increasingly becomes dependent on government spending and this is an unsustainable economic model over the medium / long term;

It steers labour and investment to unproductive sectors of the economy; The beauty of the private sector is ‘creative destruction’ and this is why only the fittest and the best survive yet when the government becomes an economic player in a mixed economy the taxpayers end-up propping or subsidizing underperforming or money losing projects and entities;

Big government always leads to a big tax burden and as soon as the overall incidence of tax grows beyond a certain point, it starts to stifle private investment and growth in the economy which then necessitates even more government spending;

Big government always leads to more debt and large deficits, since big government always spends more than it earns; Big government never is economically sustainable;

Big government stifles creatively, individualism and liberty, which are the building blocks of a free market economy.

My advice to politicians right now, at this crucial juncture, is to think beyond COVID19, stop listening so much to Dr. Fear and right-size the government (make it smaller) so we have a properly functioning free market economy come the recovery next year which stimulates private sector investment and encourages individual freedoms. Big government does not know best! Big government stifles competition! Big Government is like heroin; it is highly addictive!

I think Ronald Reagan summed up Big Government beautifully and using very simple language:

‘Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.’

Granted in the midst of all the COVID19 infections, deaths and significant economic contraction especially in tourism, the idea of Big Government is irresistible but once you scale-up to Big Government it is very difficult to right-size and down-size back to ‘normal’.

My appeal therefore is to plan for 2021 based on an economic and political model which has always worked well for Malta. We succeed as a country when we promote an open and liberal economy which positions private sector growth at the forefront and small government in the background.

When we fight for individual rights and freedoms. When we let individuals make choices and we don’t try and think for them. When we structure government income on a low tax economic model.

COVID19 should not be an excuse to bring back Big Government.

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