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Other than Obama and Krugman, Is there Anybody Who Still Thinks Bigger Government Is Good for Growth ^ | June 16, 2013 | Daniel J. Mitchell

Posted on 06/16/2013 4:02:08 AM PDT by Kaslin

I’ve repeatedly explained that Keynesian economics doesn’t work because any money the government spends must first be diverted from the productive sector of the economy, which means either higher taxes or more red ink.

So unless one actually thinks that politicians spend money with high levels of effectiveness and efficiency, this certainly suggests that growth will be stronger when the burden of government spending is modest (and if spending is concentrated on “public goods,” which do have a positive “rate of return” for the economy).

I’ve also complained (to the point of being a nuisance!) that there are too many government bureaucrats and they cost too much.

But I never would have thought that there were people at the IMF who would be publicly willing to express the same beliefs. Yet that’s exactly what two economist found in a new study.

Here are some key passages from the abstract.

We quantify the extent to which public-sector employment crowds out private-sector employment using specially assembled datasets for a large cross-section of developing and advanced countries… Regressions of either private-sector employment rates or unemployment rates on two measures of public-sector employment point to full crowding out. This means that high rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates.

So even an international bureaucracy now acknowledges that bureaucrats “incur substantial fiscal costs” and “have a large negative impact on private employment.”

Well knock me over with a feather.

Next thing you know, one of these bureaucracies will tell us that government spending, in general, undermines prosperity. Hold on, the European Central Bank and World Bank already have produced such research. And the Organization for Economic Cooperation and Development has even explained how welfare spending hurts growth by reducing work incentives.

To be sure, these are the results of research by staff economists, which the political appointees at these bureaucracies routinely ignore.

Nonetheless, it’s good to know that there’s powerful evidence for smaller government, just in case we ever find some politicians who actually want to do the right thing.

TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Editorial; Government
KEYWORDS: catoinstitute; gop; govregulations; healthcare; individual; judgesandcourts; obama; paulkrugman; polcorrectness; politics; responsibility; smallbusiness; unions; wealthredistribution
The rest of the title is: Is there Anybody Who Still Thinks Bigger Government Is Good for Growth?
1 posted on 06/16/2013 4:02:09 AM PDT by Kaslin
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To: Kaslin

I think we can refer to Obamas policies as Kenyan.

2 posted on 06/16/2013 5:20:26 AM PDT by ABN 505
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To: Kaslin

When it comes to money there are only two factors: The makers and the takers.

If your job (government on any level or exists due to a governmental regulation or law) you are a taker.....period! You produce no tangible product for society for your job only exists due to the writing of some law or regulation by government on any level.

If you actually provide a product, service or talent, you are a maker...period.

From those who produce to those who don’t is the new Obama credo and it’s time we take back our society and change it to something that includes the phrase “you are responsible for your own actions, not that of others.”

3 posted on 06/16/2013 5:40:23 AM PDT by DH (Once the tainted finger of government touches anything the rot begins)
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To: Kaslin; All
Is there Anybody Who Still Thinks Bigger Government Is Good for Growth?


Is there anyone who can point to a nation, past or present, where big government and redistributionist policies either produced or substantially contributed to the goals of America's Constitution, as stated in its Preamble, reproduced below?

"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

"Ideas have consequences." - Weaver

4 posted on 06/16/2013 8:18:26 AM PDT by loveliberty2
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To: Kaslin

5 posted on 06/16/2013 8:24:13 AM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
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To: Kaslin
One of the problems the left suffers from, among many, is they confuse symbolism for intelligence, wisdom, brilliance...

To liberals, Krugman winning a Nobel prize in economics which makes him a seer among economists...

He won his Nobel prize in "New Trade Theory" which in itself is a achievement..but not an end all things...and certainly not an expert in all things in the economic world..

Taking Krugman economic prognostic word as the gospel truth as libtards do is like asking a proctologist to look at your brain scan...

6 posted on 06/16/2013 8:39:38 AM PDT by Popman (Godlessness is always the first step to the concentration camp.)
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To: ABN 505
"I think we can refer to Obamas policies as Kenyan."

Yep. Kenyanesian Economics.

7 posted on 06/16/2013 3:44:36 PM PDT by Paladin2 (;-))
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