Budget & Tax

Brandon Dutcher | April 15, 2009

Crowding Out Oklahoma's Private Sector

Brandon Dutcher

This year's budget hole at the state capitol is big. And if the politicians' reluctance to tap the Rainy Day Fund is any indication, next year's hole could be even bigger.

This is not bad news. Government is too big. It needs to get smaller.

Don Devine recently paid a visit to OCPA, where he recalled his four years as President Reagan's director of the U.S. Office of Personnel Management. Devine was responsible for more than 2 million government employees. He reduced employment by more than 100,000 positions, earning him the exquisite appellations "Reagan's Terrible Swift Sword of the Civil Service" and "the Rasputin of the Reduction-in-Force."

"We're not cutting the budget simply for the sake of sounder financial management," Reagan once said. "This is only a first step toward ... reordering the relationship between citizen and government. We can make government again responsive to the people by cutting its size and scope and thereby ensuring that its legitimate functions are performed efficiently and justly."

Policymakers in Oklahoma need to work on "reordering the relationship between citizen and government." They need to cut government's size and scope.

How bloated is government employment in this state? Oklahoma's ratio of government employment to private-sector employment is a startling fifth-highest in the country, according to the Bureau of Economic Analysis (according to the Census Bureau, it's eighth-highest). Merely bringing that ratio in line with the national average would mean 66,000 fewer state and local government employees in this state-saving our taxpayers $2.8 billion a year.

And where exactly are all these excess employees working? OCPA's economists answer that question on the following page.

As far back as 1985 Reagan worried that America had reached the tipping point, that statism had advanced so far in this country that there was no rolling it back. His reading of history told him that no nation this far gone had ever come back. At Devine's last Cabinet meeting, the president told him: "I want us to be the first."

Sadly, we haven't turned back. Indeed, the recent "stimulus" monstrosity and other spending proposals being trotted out by our new president are only propelling us further down the road to serfdom. Heritage Foundation president Ed Feulner says that in the 35-year history of that venerable think tank, they have "never encountered legislation with such far-reaching and revolutionary policy implications" as the so-called stimulus package. "In addition to being the single most expensive bill ever proposed," Dr. Feulner says, "this measure calls for a massive expansion of the federal government's reach into the day-to-day life of virtually every citizen, business, and civic organization in the nation."

"Not only are we borrowing money that we don't have from the Chinese to spend," adds Rick Hess of the American Enterprise Institute, "but some of these dollars are forcing states to build in new outlays that are going to last long after the temporary outlays go away." It is vital that state policymakers make sure this doesn't happen in Oklahoma.

The historical trendline is not encouraging. In 1929 (the first year for which BEA data are available) Oklahoma's private sector accounted for 93 percent of all personal income earned in this state.

By 2007 the private-sector share had fallen to 68 percent. Oklahoma's private sector is the 13th smallest among the 50 states.

Indeed, today there are 16 counties in Oklahoma where the private-sector share of personal income is below 50 percent.

Some politicians remain determined to crowd out the private sector, slowly choking the goose that lays the golden eggs. Reagan, by contrast, fought for "a new economic prosperity based on reducing government interference in the marketplace."

Here's hoping for some Reaganesque leadership at 23rd and Lincoln.

Brandon Dutcher Senior Vice President

Brandon Dutcher

Senior Vice President

Brandon Dutcher is OCPA’s senior vice president. Originally an OCPA board member, he joined the staff in 1995. Dutcher received his bachelor’s degree in political science from the University of Oklahoma. He received a master’s degree in journalism and a master’s degree in public policy from Regent University. Dutcher is listed in the Heritage Foundation Guide to Public Policy Experts, and is editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His award-winning articles have appeared in Investor’s Business Daily, WORLD magazine,,, The Oklahoman, the Tulsa World, and 200 newspapers throughout Oklahoma and the U.S. He and his wife, Susie, have six children and live in Edmond.

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