The size and role of government lies at the heart of the debates in St. Paul and Washington these days, and let's just lay down the gauntlet with this declaration:

"Bigger" has been, and can be, better for all of us in the long run.

This dispute over what to do about the state budget shortfall and the federal stimulus package fits under the category of "nothing new under the sun." This central issue — what we do together, what we do by ourselves, how much we contribute to the community fund, how much we keep in our own bank account — has been a fault line in our political landscape since our national founding 218 years ago, and our statehood 151 years ago. It's a natural and even healthy thing to fight about.

The last 30 years have been dominated by the forces for less "we" and more "me," and framed by Ronald Reagan's declaration in his first inaugural speech that government was no longer "the answer," but rather "the problem." Tax cuts were the panacea and worship for the free market, exemplified by Wall Street, reigned supreme.

It actually made some sense then, after about a half-century of prodigious growth by the federal and Minnesota state-local governments. Tax increases after the Great Depression — to finance the New Deal, World War II, the Fair Deal, the Cold War, the New Frontier, the Minnesota Miracle (tax increases to fund education), and the civil rights and Great Society era — had wearied many citizens. Most were prospering as a partial result of government's equalizing role but wanted to keep more of that money. Let's just accept that the individual should not be overwhelmed and overtaxed by the government, subjective as that boundary might be, and it probably was time to take a break. 

Time for a communitarian approach
But the break's over, say many credible mainstream observers, from erstwhile conservative David Brooks to billionaire Warren Buffet, and now it's time to get to work in a communitarian way again on what ails us. And let's brace ourselves to accept that this might require a modest tax increase, although it's not likely to change our status as the lowest-taxed nation of the wealthy democracies, and our new status in Minnesota as an average-tax state.

Ahhh, but it was a really fun tax break. Federal taxes and state taxes have been cut broadly and in response to just about every specific problem, deregulation had a glorious run, and now the federal deficit is out of control, and the national economy resembles the aftermath of a frat party. State income taxes were cut deeply in Minnesota, more than almost any other state, and our governments' share of income is smaller than it's been in decades (ranking 30th in total revenues as a percent of income). And our economy for the first time in decades actually is underperforming the poorly performing national economy. 

But we have more luxury hotels in Minneapolis than we've ever had, and more wealthy gated enclaves and executive mansions by the thousands have popped up in our cities and suburbs. Poverty's inching up again, classrooms are overcrowded and some bridges had to be closed, but a lot of private wealth was created and kept, at least until the Wall Street collapse last fall.

As we survey the damage, it helps to study the underappreciated fact that government growth and all those taxes from 1930s through the 1970s did provide answers and did solve a lot of problems.  

A force for good
To put it more boldly, our federal and state governments overwhelmingly have been a force for good and positive change. Leaving aside the conservative counterattack about the immediate economic effects of government growth under the New Deal, government tripled or quadrupled in its "take" from private income between the 1920s and 1980. And the nation and state during that period prospered as never before and broadly so. Private and public sectors working together created a middle class of a size and scale that simply did not exist before the 1920s.

Missions accomplished or substantially aided by our democratic governments in the last 80 years include: smashing victories over world fascism and world communism; a trip to the moon and outer space and all the scientific and technology advances spawned by that adventure; massive environmental cleanups and wilderness protection; dramatic reductions in elderly poverty through Social Security and health programs; disease control and prevention and lengthening of life spans;  and most important, the elevation out of second-class citizenship of perhaps two-thirds of our population (women and racial minorities, through a variety of governmental regulations, interventions and appropriations).  

Other pieces in this success story could fill many books: improvements in workplace safety; national relief in response to local natural disasters (except for Katrina); rural electrification; an interstate freeway and infrastructure systems that once were a model for the world; and a major governmental hand in the creation of the internet and technological and biomedical research.

In Minnesota, we did more of this stuff than most other states, and did it in a distinctively efficient and effective way. Our economy outperformed the nation's, and we rose from a ranking of about 20th in per capita income to well within the top 10 between the 1960s and the 1990s, despite higher taxes.

Orthodoxy getting a thrashing
At long last, we are hearing bolder challenges to the conventional wisdom that the public sector can't possibly return to previous tax levels or get larger. That orthodoxy is getting a good thrashing from a number of thinkers and writers these days and even recognition in mainstream media.

Time magazine's Jan. 19 issue, for instance, contained a commentary entitled "The Case for Bigger Government," by Jeffrey D. Sachs, director of Columbia University's Earth Institute and the author of Common Wealth. Sachs postulated, with incisive macro-economic analysis, that the "time has arrived to restore national prosperity and security with a smartly rebalanced partnership between the public and private sectors." He called for a "new, even revolutionary consensus that the U.S. government can offer value for money."

Another broad treatment of the subject has been published by economist Jeff Madrick, in his book "The Case for Big Government." Showing how most prosperous nations have higher tax-and-spending levels and also better quality-of-life measures in health and education and social well-being, Madrick concludes.

"There really is no example of small government among rich nations."

Dane Smith is the president of Growth & Justice. A nonpartisan advocate for fair taxation and smart public investment, Growth & Justice believes a sustainable economy provides the foundation for a just society.