The combination of an economic crisis and unified government is almost always a bad time for limited government. Recent events have already demonstrated that in spades.
However, there is a small ray of hope for free market advocates: public opinion data show that the majority of the public remain skeptical about big government. Question 19 on this recent Washington Post/ABC News poll shows that 53% of the public prefer “smaller government with fewer services” to “larger government with more services” (supported by 43%). Note that this question wording is slightly biased against the small government side because it lists a negative consequence of smaller government (a reduction in services), while omitting any negative consequences of larger government (such as higher taxes or increases in the national debt). Other surveys show that the majority of the public was opposed to the October bank bailout and also to the auto bailout. On the negative side, surveys show that a majority supports increased government spending to stimulate the economy, especially if the plan also includes tax cuts.
Public skepticism probably won’t stop Obama and Congress from enacting significant expansions of government over the coming months, even though it probably did lead Obama to promise a “net spending cut” during the campaign. However, it could help free market advocates limit the damage. By appealing to the public’s still strong suspicion of government, they might be able to force Congress and the administration to expand government somewhat less than they would otherwise. They might also be able to persuade the Democrats to increase the proportion of tax cuts in the stimulus plan and reduce the role of spending – as may already have happened to some extent.
To avoid confusion, I should emphasize that I am not claiming that the fact that majority public opinion coincides with my views on some of these issues proves that I am right. I have often emphasized that public opinion about political issues is heavily influenced by ignorance and irrationality. And that remains true even in cases where the public happens to agree with me.