"It's not an easy decision, and especially because I support a robust system of public financing of elections," Obama told supporters in a video message Thursday. "But the public financing of presidential elections as it exists today is broken, and we face opponents who've become masters at gaming this broken system."

I don't know about you, but sounds to me like he not only rejected the system, but also denounced it.

Seriously, though. The move wasn't unexpected, and neither are the critics who decry privately financed campaigns. The New York Times said it risks "setting a dangerous precedent of fully scrapping public financing." Public Citizen said the taxpayer-financed "system provides a hefty $84.1 million grant to each of the general election nominees for the two-month-long general election campaign - plenty of money to run successfully." Echoing that, today's editorial in USAToday asks, "Shouldn't that be enough?"

Plenty of money? Really? Compared to what? Consider two ratios.

1. In 2000 the federal government spent about 1.8 trillion (~18% of GDP), and total campaign expenditures on all federal elective offices was about $1.85 billion (about $1b on congressional races, $0.35b on presidential, and $0.5b in soft money). So federal public sector advertising was 1/1000th of federal public spending. Ratio 1 = 0.001.

2. In 2000 the private sector share of GDP was about $7.5 trillion (after federal, state and local spending net of intergovernmental transfers), and total private sector advertising, according to Advertising Age, was $240 billion (Statistical Abstract Table 1251). So private advertising was 3.2% of private spending. Ratio 2 = .032.

By this comparison, private sector advertising is more than thirty times greater than the amount we spend on federal elections trying to make sure we get the right person for the job. Given how much we expect from our federal government, isn't it surprising that campaign spending isn’t twice, or even ten times, more than it is right now?

Granted, much valuable information slips through the cracks of these aggregates. (BTW, I could not find as reliable aggregates for the 2004 federal elections, but the ratios are in the same ballpark.) And I'd much rather see the two ratios come closer together by reducing the government's share of GDP spending. But Obama’s decision clearly is a good sign for a campaign finance system that—I’m here to say it—needs more money flowing through it.

For research summaries of what we don't know about what contributions buy, see my chapter on Campaign Finance in the Encyclopedia of Public Choice, and especially Thomas Stratmann's excellent meta-analysis and literature survey in 2005 Public Choice.