To Get Economic Growth, Shrink The State

These guys make the case.

http://online.wsj.com/article/SB100...0925560872.html?mod=WSJ_Opinion_LEFTTopBucket

quote:
“…according to the OECD's PISA studies, pupils in small-government countries achieve significantly better results in reading, math and science than those in big-government countries. Life expectancy is also slightly higher in small-government countries (at 81.3 years) than in big-government countries (79.9 years).”

Taxcutter says:
Smaller government is better government.

 

Fiscal policy is a balancing act. Governments must be able to know when to increase spending, when to cut taxes, when to cut spending, and when to increase taxes, and by how much. Despite how centralized their government is, China succeeds in this regard because many if not most of their leaders in the Politburo are highly educated economists. They know when to put the brakes on government stimulus, or when to put the brakes on austerity.

 

Most studies on the matter show this. All else being equal the most productive countries are the ones with the most economic freedom, which is what should be expected since as government grows, incentives to produce shrink. If an argument is what it takes to convince a reasonable man, and a proof is what it takes to convince even an unreasonable man, what kind of person is it that can be convinced by neither?

 

Pardon me if I don't gullibly and blindly believe an op piece from the Murdoch Street Journal, given the amount of distortion and crap we've seen from it before.

 

An economy required to relinquish almost 45% of its production to *ever increasing* federal, state and local government control will never become prosperous again....unless that absurd number is drastically reduced.

Sorry.

 

Which country are you referring to that does that?

 

It's not your fault.

 

The top tax bracket was as high as 95% during an era of US prosperity that spanned several decades.



And now we can't pay our bills, maintain our infrastructure or build new infrastructure? I wonder why...



The New Deal, The New New Deal and the Great Society led this nation out of industrialized squalor and into a prosperous world power that focused on building an economy from the ground up which provides a steady base as opposed to an economy built from the top down which threatens to teeter and topple over on a moment's notice.

 

I will agree that when the government is heavily involved in the economy, they must be able to know when to increase spending, when to cut taxes, etc. Unfortunately, it is impossible for a government to be efficient or even productive in these decisions. China has the benefit of over a billion souls to throw into poverty so that they can be the industrial provider for the rest of the world.

Come on, man. Income taxes, SS & medicare, property, sales, excise, corporate, etc. Its easy that 45 cents of every dollar goes to some form of government through some form of taxation.

 

The US.

Federal, state and local governments currently control/disseminate/devour approximately 6.3 trillion dollars of our approximate 15 trillion dollar GDP....or 42%

When spending is calculated using our "real" GDP of 13.5 trillion dollars, that figure is 46.6%

46.6 + 42 = 88.6
88.6 divided by 2 = 44.6.....or almost 45%

 

What was tax revenue to GDP during that time? Was it greatly different than eras of lower income tax rates?

Perhaps a quick look at our increases in expenditures would help with your quandary.

One could say that the debt that the programs established from those two endeavors is the bloated weight at the top which threatens to teeter and topple over on a moment's notice. This whole bottom up/top down economy is rhetorical nonsense. The new deal or great society did very little if anything for the economy in a positive way. It is almost certain that they are a net drag on growth.

 

Todd, you must understand that while tax rates were incredibly high, the trade-off was a large number of tax expenditures. The concept of low taxes and less tax expenditures is a new phenomenon, which started with Ronald Reagan and the Tax Reform Act of 1986.

 

Reliance on correlation = causation fallacies...as collectivist wizards of economics and taxation are so ideologically shackled...
prove absolutely nothing more than obvious desperation to find away possible to support the confiscation of more private sector wealth.

 

How do any of these statistical derivative coincidences in any way prove that more government causes economic growth?

 

Iriemon posted:
"Pardon me if I don't gullibly and blindly believe an op piece from the Murdoch Street Journal..."

Taxcutter says:
You have no problem gullibly and blindly believing op pieces from Senor Slim's NYT.

 

A graph that ends in 2009 is not terribly relevant today.

 

For those unable to discern the implications of this chart, regardless of what government has done in attempts to extract more revenue from its subjects, it has never collected more than 21% of GDP.

 

That poster reminded me of those old 'how to survive nuclear war' education films.

Truely terrifying. With softly spoken actors giving advice how to prepare for death but in a calming explaination.

"In the event of nuclear war. Draw the curtains. This shall protect you from the atomic blast."

 

Part of what the government governs is the economy. Doesn't it logically follow that as the economy grows, the government has to grow in order to govern it?

I'm not a fan of big government or anything. It just seems like a logical consequence of a big economy.

I'd be all for a small economy and a small government. But I don't think you can have a big economy and a small government.

 

You do know that China's real estate bubble is popping right?

Sometimes economists don't know everything.

 

Correct. Government must be the PROPER size... not (necessarily) as 'small' as we might wish it to be.