I had a friend who used to work for U. S. Department of Energy (DOE) and was there when Al Gore reinvented government. That was when the first wave of privatization of government services began. My friend told me that the DOE contracted out about two-thirds of its work, but only laid-off about a fourth of its employees. Many bureaucrats were paid to do little except read novels, because it was more interesting than sitting and doing nothing.There was no work for them to do.
McMaken is also correct to note that government spending has skyrocketed since LBJ.
In 1968, the US government spent $883 dollars for every one of the 201 million Americans, or annual outlays totaling 178.1 billion. In 2011, the US government spent a whopping $11,493 for every one of the 313 million Americans for total outlays of 3.6 trillion. That's an increase of 1,923 percent since 1968. The CPI over this period increased 545 percent, so we're talking an enormous increase, even when adjusted for the official inflation rate.
Additional evidence, as if any were needed, can be seen by looking at the Federal Registry which houses the U.S. Federal Code which comprises all federal regulations. In 1960 there were 20,072 pages in the Registry. In 2011 that total was up to 82,415. That is a more than four-fold increase. You can learn about our dismal regulatory state in some detail by reading Ten Thousand Commandments 2012, by Clyde Wayne Crews, Jr. at the Competitive Enterprise Institute. Anyone who says we are living in an era of small government is either woefully mislead, willfully ignorant, or just lying.