This is perception more than anything else. I don't see many people complaining that government was too big in the "golden age" of the 50's and 60's, yet total government revenue as a percentage of GDP has been pretty stable since then: http://www.usgovernmentrevenue.com/include/usgr_chart3p22.pn....
Indeed, if you factor out the huge increase in social security and medicare expenditures that result from the aging of the population between 1950 and today, the rest of government is probably smaller today than it was then.
Moreover, much of what seems to be "growth" in government is the result of transfer payments--things like Social Security checks that are taken out of one pocket in the private sector and deposited directly into another pocket in the private sector. In terms of bureaucratic machinery, at least the federal government has been shrinking: http://www.nextgov.com/cio-briefing/wired-workplace/2010/09/....
In 1950, there were 1.44 million federal workers for 150 million people. The number of federal employees peaked in absolute terms in 1990, at 2.25 million, but that number actually represents a decline in relative terms, because by then the U.S. had 250 million people. Today the federal workforce is at about 2.15 million, while the population is at 310 million. That is to say we have twice as many people as we did in 1950, but the headcount of the federal government is only 50% larger.
As for your other points: collusion, etc. We are substantially less regulated today than we were in the 1950's and 1960's: http://en.wikipedia.org/wiki/Deregulation#Deregulation_1970-.... Many major industries (trucking, airlines, energy, finance, communications) were deregulated between 1970-2000. With decreased regulation came decreased opportunity for regulatory capture.
The idea that things are worse today than they used to be is a lot of "back in the good old days" day dreaming.
yet total government revenue as a percentage of GDP has been pretty stable since then
I'd be very careful using GDP for anything. A while back I took a look at the finer details of how GDP is defined by the US government, and more importantly, how that definition has changed over time.
I wouldn't trust GDP further than I can throw a truck. As a metric it has become nearly useless, and (I feel) highly deceiving.
Immediately after world world two, the U.S. had arguably the largest percentage of world GDP of any political entity in world history. This occurred because the entire industrial capacity, major cities, and young population of every other developed country had been devastated.
Also, there was less stratification between the rich and the poor.
These are the two basic factors people refer to when they see the 50's and 60's as a golden age.
In other words, the main difference to "big government" since the Cold War is that it's now politically astute, rather than alarmingly unpatriotic, for the Right to attack it. :)
I'd be more interested in government spending (not including transfer payments) then number of employees. There has been a dramatic shift in the number of things which are out-sourced to private companies. (Additionally, many of companies providing these services have the government as their main or sole buyer.)
In other words, the real question is: what fraction of societal expenditures are being directed by the political process?
Expenditures in 2006 were about 20% of GDP versus 17% of GDP in 1965. In 2006, social security accounted for 20.5% of the budget, versus 14.8% in 1965. That's 4.1% of GDP versus 2.5% of GDP. In 2006, medicare was 12.2% of the budget. In 1965, Medicare didn't exist (it was created that year). That's 2.5% of GDP versus 0% of GDP.
Net of social security and medicare, total federal expenditures in 1965 were 14.5% of GDP, and in 2006 they were 13.4% of GDP. At least at the federal level, the proportion of GDP spent on things other than the care of the elderly shrunk slightly over 40 years. Indeed, this is probably an under-estimate, when you allocate the percentage of medicaid, the NHS budget, the DHHS budget, etc, spent providing care for the elderly, researching diseases that primarily effect the elderly, etc.
Indeed, if you factor out the huge increase in social security and medicare expenditures that result from the aging of the population between 1950 and today, the rest of government is probably smaller today than it was then.
Moreover, much of what seems to be "growth" in government is the result of transfer payments--things like Social Security checks that are taken out of one pocket in the private sector and deposited directly into another pocket in the private sector. In terms of bureaucratic machinery, at least the federal government has been shrinking: http://www.nextgov.com/cio-briefing/wired-workplace/2010/09/....
In 1950, there were 1.44 million federal workers for 150 million people. The number of federal employees peaked in absolute terms in 1990, at 2.25 million, but that number actually represents a decline in relative terms, because by then the U.S. had 250 million people. Today the federal workforce is at about 2.15 million, while the population is at 310 million. That is to say we have twice as many people as we did in 1950, but the headcount of the federal government is only 50% larger.
As for your other points: collusion, etc. We are substantially less regulated today than we were in the 1950's and 1960's: http://en.wikipedia.org/wiki/Deregulation#Deregulation_1970-.... Many major industries (trucking, airlines, energy, finance, communications) were deregulated between 1970-2000. With decreased regulation came decreased opportunity for regulatory capture.
The idea that things are worse today than they used to be is a lot of "back in the good old days" day dreaming.