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CAPSULE COMMENTARY: “100 Years of Government Expansion”

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“How different life was for the average American 100 years ago! When the 20th century began, there was no federal income tax, and all levels of government took in taxes equivalent to about 6.5 percent of GDP, with more than 60 percent of those taxes collected by state and local governments. The tax bite from all levels of government has increased today to about 30 percent, with the federal government taking 65 percent of that total. In 1900 welfare-state spending by the federal government was virtually nonexistent; in 1999, about 60 percent of federal spending was on welfare and income-redistributive activities. In 1900 federal public debt equaled 7 percent of GDP, while by the end of the century, that debt burden had increased to 40 percent of GDP. One hundred years ago, only about 4 percent of the total American labor force was directly employed by the various levels of government; now that number has increased to more than 15 percent of the American working population. The American people, whether they realize it or not, have increasingly become the vassals of those at all levels of government who control and dictate their fate.”

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Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).