Evidence that big government hurts the economy

June 30, 2010

In this Center for Freedom and Prosperity video, Dan Mitchell provides graphic evidence that government growth beyond a certain point actually hurts a nation’s economic performance:

While Mitchell doesn’t explain why this is true (something he does in other videos), the reason seems clear: government spending is inherently wasteful as money is often diverted to sub-optimal, politically oriented  purposes (such as vanity airports and bridges to nowhere), and that money is not disciplined by market forces. In other words, national governments’ wasteful deployment of capital is not punished by those governments’ going out of business. Furthermore, this money is taken out of private hands and consequently is no longer available for productive uses such as investing, saving, and job creation.

That isn’t to say all government is bad. By providing open markets, the consistent rule of law, and a strong protection of property rights, government actually helps create the conditions for prosperity. Beyond that point, however, it becomes a parasite, sucking the lifeblood from its host, the private sector.

If Mitchell and other free-market economists are right (and I strongly suspect they are), then one of the best things the federal government could do would be to reduce federal spending from its current 40% of GDP to about 15-20 percent.  That, however, is something that will not happen under the Democrats, and I have to wonder if even a Republican government would have the courage to make the needed cuts, given all the political oxes that would have to be gored.

Probably not, until the national consensus itself changes. And that may not be as far off as you think.

(via International Liberty)

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“Control the people?” Dingell’s gaffe

March 24, 2010

Michael Kinsley once said that the definition of a “gaffe” is when a politician accidentally tells the truth. Michigan representative John Dingell (D-MI) may well have committed one when he said during a radio interview that ObamaCare’s benefits will take time to implement because it takes a while to control the people:

Let me remind you this [Americans allegedly dying because of lack of universal health care] has been going on for years. We are bringing it to a halt. The harsh fact of the matter is when you’re going to pass legislation that will cover 300 [million] American people in different ways it takes a long time to do the necessary administrative steps that have to be taken to put the legislation together to control the people.

And in case you don’t believe your lying eyes, here’s audio, courtesy of Hot Air:

At least he’s an honest statist, unlike his leader in the White House. Even if he didn’t mean to.

I’ll give Mr. Dingell half a point for being right about the Republicans: in the time they controlled Congress, they really did not do much to address problems in the health care system, thus ceding the issue to the Social Democrats*. However, it is an absolute untruth to say they have presented no plan during the current debate nor offered any cooperation. Republicans regularly asked to be included in negotiations and drafting, but were mostly excluded in repeated acts of high-handed arrogance. Ironic, to say the least, given the Democrats used to whine about being cut out when Tom Delay was Republican Majority Leader.

And they have a plan. It has been available for months. It was presented ably at the so-called “health care summit” with the President and the congressional Social Democrats, particularly by Representative Paul Ryan (R-WI). So, for Dingell to claim the conservatives have done nothing to help is … well, he either hasn’t been paying attention or he’s lying.

Maybe John will accidentally tell us the truth one day.

*(I’ve decided it’s wrong to refer to the Democrats as a “liberal, democratic party.” They are neither liberal in the classical sense of the phrase, nor are they really democratic these days. Instead, the Democratic Party is more of a statist, progressive party with much more in common with European social democratic parties. Hence it seems more accurate to call them “Social Democrats.” Or maybe “Progressive Statists,” as the mood takes me. Regardless, they’re sure not the Democratic Party anymore.)

LINKS: Sister Toldjah.