Posted in big government, Consumption Inequality, Dependency, Economic Issues, Education, Entitlements, Government Spending, Policy Issues, Poverty, Tax Policy, Uncategorized, Wealth

Watch “Milton Friedman – The Robin Hood Myth” on YouTube

The Political Dogma:

Government social “reinvestment” programs benefit the poor at the expense of the wealthy.

The Political Reality, as instantiated by Director’s Law:

Public program expenditures primarily benefit the upward rising middle classs at the expense of the wealthy AND the poor.

Posted in Economic Issues, Government Spending, Government Stimulus, Job loss, Keynesian Economics, News From Washington, Organizational structure, Policy Issues, Uncategorized

Government Shutdowns and Economic Activity | International Liberty

Dan Mitchell

From a microeconomic perspective, there is some genuine disruption for affected federal bureaucrats, even if they eventually will get full – and lavish – compensation for their involuntary vacations. And some federal contractors are being hit as well.

There’s also a debate about the macroeconomic impact, with some making the Keynesian argument that government spending is somehow a stimulant for the economy.

I’ve endlessly explained why Keynesian argument is bad in theory and a joke in reality.

In this interview, I tried to make a more nuanced point, explaining that we should focus more on gross domestic income (GDI), which measures how we earn our national income, rather than gross domestic product (GDP), which measures how we allocate national income.

I’m not sure I got my point across effectively in a 30-second sound bite, but it’s a point worth making since people who understand GDI are much less susceptible to the Keynesian perpetual-motion-machine argument.

But enough from me.

Harold Furchtgott-Roth, in a column for the Wall Street Journal, analyzes the potential macroeconomic consequences of the shutdown.

Does the U.S. government shutdown endanger economic growth? It has led to missed paychecks… Yet these employees represent approximately 0.5% of all American workers… The effect of the furloughs on gross domestic product is likely small. …U.S. GDP is more than $20 trillion annually, or approximately $55 billion daily. The daily compensation of furloughed federal workers is about $52.5 million, or less than 0.1% of GDP.

Source: Government Shutdowns and Economic Activity | International Liberty

Posted in big government, Dependency, Economic Issues, Government Regulations, Government Spending, Liberty, Policy Issues, Tax Policy, Uncategorized, Wealth, Welfare State

What’s Required to Finance Roads, Schools, and Healthcare? | International Liberty

To elaborate, not only do jurisdictions such as Hong Kong and Singapore enjoy impressive growth, they also get very high scores for infrastructure, education, and health outcomes.

In other words, these nations are role models for “public sector efficiency.”

What they don’t have, by contrast, are expensive welfare states that seem to be correlated with poor outcome for basic public services.

https://danieljmitchell.wordpress.com/2018/11/08/whats-required-to-finance-roads-schools-and-healthcare/

Posted in big government, Economic Issues, Government Spending, Job loss, Medicare, News From Washington, Policy Issues, Poverty, Progressivism, Reforming Medicare, Tax Policy, Uncategorized, Unemployment, Wealth, Welfare State

Rich Nations that Enact Big Government Don’t Remain Rich | International Liberty

“United States would be almost as poor as Mexico today if growth was just one-percentage point less every year starting in 1895.

That was just a hypothetical exercise.

There are some very sobering real-world examples. For instance, Nima Sanandaji pointed out this his country of Sweden used to be the world’s 4th-richest nation. But it has slipped in the rankings ever since the welfare state was imposed.

Venezuela is another case study, as Glenn Reynolds noted.

Indeed, according to NationMaster, it was the world’s 4th-richest country, based on per-capita GDP, in 1950.”

…Now? Not so much!

https://danieljmitchell.wordpress.com/2018/07/29/rich-nations-that-enact-big-government-dont-remain-rich/

Posted in big government, Economic Issues, Government Spending, Liberty, National Debt, Policy Issues, Tax Policy, Uncategorized, Wealth

The Continuing Success of Switzerland’s Spending Cap | International Liberty

“Governments should copy Switzerland and impose a spending cap. I explained this system in a column for the Wall Street Journal back in 2012.”

…85% of its voters approved an initiative that effectively requires its central government spending to grow no faster than trendline revenue. The reform, called a “debt brake” in Switzerland, has been very successful. Before the law went into effect in 2003, government spending was expanding by an average of 4.3% per year. Since then it’s increased by only 2.6% annually. …politicians aren’t able to boost spending when the economy is doing well and the Treasury is flush with cash. Equally important, it is very difficult for politicians to increase the spending cap by raising taxes.

https://danieljmitchell.wordpress.com/2018/06/26/the-continuing-success-of-switzerlands-spending-cap/

Posted in American Exceptionalism, big government, Crony Capitalism, Dependency, Economic Issues, Free Society, Free-Market, Government Regulations, Government Spending, Influence peddling, Keynesian Economics, Liberty, Organizational structure, Policy Issues, Progressivism, Tax Policy, Uncategorized, Welfare State

Watch “How Big Should Government Be? Left vs. Right #1” on YouTube

Posted in big government, Economic Issues, Government Spending, Policy Issues, Tax Policy, Uncategorized, Welfare State

When America’s Fiscal Crisis Hits, Be Forewarned that Tax Increases Will Make a Bad Situation Worse | International Liberty

Moreover, I will point out that higher taxes most likely will simply trigger and enable additional spending. And I will warn that tax increases will undermine economic performance.
Regarding that last point, three professors, led by Alberto Alesina at Harvard, have unveiled some new research looking at the economic impact of expenditure-based austerity compared to tax-based austerity.

https://danieljmitchell.wordpress.com/2018/02/23/when-americas-fiscal-crisis-hits-be-forewarned-that-tax-increases-will-make-a-bad-situation-worse/