“There’s a clear cause and effect here that is as neat and predictable as a law of physics: as government expands, liberty contracts,” said President Ronald Reagan (1911-2004) in his farewell address on January 11, 1989.
 
The phrase had been in use in the 1950s. “As government expands, liberty contracts” appeared in 1954 in The Tax Digest (California Taxpayers’ Association), attributed to Lloyd Wright of Los Angeles.  “As government expands, the liberty of every one of us contracts” appeared in a 1958 bulletin.
 
“As a government grows, liberty decreases” is a popular quotation that has been incorrectly attributed to Thomas Jefferson (1743-1826) since the 1970s. “The bigger the government, the smaller the citizen” is a similar saying that was written by conservative radio talk show host Dennis Prager in 2009.
 
 
Wikipedia: Ronald Reagan
Ronald Wilson Reagan (February 6, 1911– June 5, 2004) was the 40th President of the United States (1981–1989) and the 33rd Governor of California (1967–1975). Prior to his political career Reagan was also a famous motion picture actor and president of the Screen Actors Guild.
 
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The Demand of the Times
By Dhirendra Nath Majumdar
Sevagram, Wardha: All India Spinners’ Association
1949
Pg. 21:
The Government is intended mainly for the purpose of keeping order. That is, as the field of Government expands to that extent will the liberty of the individual get curtailed.
 
10 December 1950, Southtown Economist (Chicago, IL), pg. 4, col. 1:
THERE is a growing awareness among the people of this country that as the authority of government expands, liberty diminishes. The number of people who cannot agree with the complacent theorists who claim that “a little socialism” is nothing to be alarmed about is increasing. This is a good thing.
   
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How to keep our liberty:
A program for political action
By Raymond Moley
New York, NY: Knopf
1952
Pg. 177:
But as the area of government expands, the great attribute of liberty — the right to choose the place and nature of one’s job — is steadily narrowed.
 
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The Tax Digest
California Taxpayers’ Association
v. 32 - 1954
Pg. 330:
AS GOVERNMENT expands liberty contracts. That is the political axiom elaborated by Lloyd Wright of Los Angeles.
   
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The Edison Electric Institute Bulletin
v. 26-27 - 1958  
Pg. 235: 
As government expands, the liberty of every one of us contracts.
       
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Bulletin
By American Patent Law Association
v. 1957-1958 - 1960  
Pg. 182:
As government expands, the liberty of every one of us contracts.
 
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The State of the Union:
Commentaries on American democracy
By Robert B. Dishman
New York, NY: Scribner
1965
Pg. 392:
But as the area of government expands, the great attribute of liberty— the right to choose the place and nature of one’s job— is steadily narrowed.
 
24 March 1965, Dallas (TX) Morning News, “Liberty,” sec. 4, pg. 2:
To The Dallas News:
Liberty—what a glorious word; how greatly we should treasure it! For the past few decades, liberty has been slipping from our grasp. As government expands, liberty contracts. Only an aroused people who love liberty can hold onto it. Once gone, it may be gone forever.
 
Judge Learned Hand said it best: “Liberty lies in the hearts of men and women. When it dies there, no constitution, no court can save it.”
JANELLE PUCKETTE
Route 1, Box 6, Garland, Texas.
 
New York (NY) Times
Transcript of Reagan’s Farewell Address to American People
Published: January 12, 1989
(...)
But back in the 1960’s when I began, it seemed to me that we’d begun reversing the order of things - that through more and more rules and regulations and confiscatory taxes, the Government was taking more of our freedom. I went into politics in part to put up my hand and say, “Stop!” I was a citizen-politician, and it seemed the right thing for a citizen to do.

I think we have stopped a lot of what needed stopping. And I hope we have once again reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: as government expands, liberty contracts.
 
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Enemies Within:
The culture of conspiracy in modern America
By Robert Alan Goldberg
New Haven, CT: Yale University Press
2001
Pg. 241:
Arizona Senator Barry Goldwater declared in the 1960s, “Government represents power in the hands of some men to control and regulate the lives of other men. And power, as Lord Acton said, corrupts men. ‘Absolute power,’ he added, ‘corrupts absolutely.’ President Ronald Reagan echoed Goldwater in his 1989 farewell address: “As government expands, liberty contracts.”