The growth of government is associated with a wide range of adverse economic consequences; this statement is one that wouldn’t be denied by any blogger on this site.
However, I think it is reasonable to also claim that the growth of government can lead to a host of damaging social and political consequences. Some facets of these which spring to mind are: the weakening of emergent social arrangements within civil society, such as families and charities, and of their authority; the dilution of self-reliance as people come to perceive the government, and not business, as the primary organisational vehicle for fostering improvements; and the distortion of democratic politics toward becoming a frenzied contest concerning who can deliver the most short-term favours to prized constituencies, regardless of economic or fiscal implications, rather than a sober discussion as to how best to keep protecting individual freedoms in light of changing circumstances.
In a recent piece by Reason.com science writer Ronald Bailey, extracted by the Wall Street Journal in its must-read daily “Notable and Quotable” feature, another consequence of a growing public sector is identified. This relates to the growing preparedness of rent-seekers to embellish their claims for subsidies, or tax and regulatory favouritism, with hyped-up retorical spin thus economising or concealing the truthful underpinnings of their claims. Two examples in this regard include global warming alarmism and exaggerations of the extent of poverty in advanced economies (but there are many more).
Anyhow, here is the relevant extract which appears in the WSJ:
For decades, an increasingly large percentage of our economic output has been moved from the positive-sum game of markets and private property to the zero-sum game of government and politics. According to the Office of Management and Budget, total government spending in the U.S. rose from 17 percent of GDP in 1948 to 35 percent in 2010. As public choice theory predicts, the more resources government bureaucracies control, the more lobbyists, crony capitalists, and entitlement clients will appear seeking to divert handouts into their pockets. Such would-be beneficiaries need experts to construct the facts that they use to justify to political patrons and agency bureaucrats why they deserve a share of the government’s largesse. To the extent that we live in a “post-truth era,” it is in good measure because it pays so well to dissemble, exaggerate, and spin for government grants and favors.