This Chart Busts The Myth That Entitlements Destroy Growth

Business Insider ^ | Jul. 11, 2012, 11:23 AM | Matthew O'Brien

[DannyTN]

...The chart below compares average social spending with adjusted per capita GDP growth since 2000. ...

[DannyTN]

"Get down off the theory cloud. Look at reality. The social spending in this country is out of control. No serious Christian can condone it as an example of good stewardship. It is proflegate in every sense of the word."

I agree with you. There is fraud and mismanagement everywhere. I'm not in favor of being stupid about it.

But I'm not for killing safety nets, simply because they have been mismanaged either.

[RobbyS]

Suppose instead of , or in addition to “US,” you sprinkled ten of the States. Say: Massachusetts, New York, Michigan, Illinois, Minnesota, Colorado, ,Florida, ,Texas, Georgia, California. What would it look like?

[chopperman]

How many of those countries have any capability of defending themselves let alone the burden of defending others?

[theBuckwheat]

The economist Ludwig von Mises showed in 1920 [1,2] that since a socialist economy destroys price information via government intrusion, the myriad of participants in the economy are unable to make a fully rational calculation about true profit and loss. Any economic activity that operates at a loss cannot be “sustainable”, a concept the left loves to scold us about, yet cannot really grasp.

Taking another approach, the Nobel economist F.A. Hayek showed that a national economy had such an immense myriad of dynamic economic relationships that no single committee or bureaurcracy, no matter how smart or how well staffed, could possibly know enough to direct prices or production levels. His Nobel Lecture [3] was entitled The Pretence of Knowledge. Hayek had previously used this idea as the basis for a very thorough article [4] on the subject, “The Use of Knowledge in Society.”

When these two different withering critiques of socialism are combined, it is easy to see that not only is it dangrously foolish to think that economic decisions can successfully be made by government, but that competing bureaucracies will invariably react to the consequences of intrusions in the marketplace by each other. It would be like trying to control the height of waves on a lake by measuring them from the back of a boat circling in its own wake.

[1] Economic Calculation in the Socialist Commonwealth by Ludwig von Mises
http://mises.org/pdf/econcalc.pdf

[2] Why a Socialist Economy is “Impossible” by Joseph T. Salerno
http://mises.org/econcalc/POST.asp

[3] The Pretense of Knowledge
http://mises.org/daily/3229

[4] “The Use of Knowledge in Society,” American Economic Review, XXXV, No. 4; September, 1945, pp. 519–30.
http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=92

[DannyTN]

"Please provide Scriptural support for Governments taking care of the poor. Government as it's core is compulsion. All that government does is ultimately backed up by the threat of force.

See post 15. And nobody likes authority. Doesn't mean all authority is bad.

Do you realize that most "programs for the poor" have 80% or more of the dollars absorbed by the bureaucracy (direct and indirect costs)?

I don't believe it's that bad, but even if so, then that's badly mismanaged. I'm not in favor of being stupid about it. But I'm not in favor of removing safety nets, simply because it's being mismanaged. Measure the effectiveness and change the management until it improves.

[RobbyS]

Who is talking about killing safety nets? What we are trying to avoid happing is what happened to Great Britain from 1945-1980. The economy lagged significantly because the Government—Labour and Tory— put as bucket under every leak in the roof rather than repairing/replacing the roof.

[DannyTN]

"The “social spending” in the chart apparently includes both public and private “social spending”. That means that if I spend my money at my physician’s private practice, it is included as “social spending” even though it is entirely in the private sector. I think that point alone makes the analysis meaningless."

Good point.

[Dr. Thorne]

Let’s be clear - most of what come from The Business Insider is leftwing Bovine Excrement! Why do some FReepers insist on posting this trash? So that we can understand that Leftists are liars? Right. And in other news, water is wet.

[DannyTN]

All good points.

[sima_yi]

I'm wondering if anyone can poke holes in this chart.

Actually, you already did, with your first sentance.

These data (in the chart) have been carefully cherry-picked to support the desired conclusion. Notice how countries (Cuba, for example) where very high (relative) amounts are spent on "social spending" are all missing.

[fireforeffect]

Wait one. I am printing it out.

[Teacher317]

Okay, so you think government programs for the poor are a good idea. Fine. (Personally, I prefer the majority of the work to be done by private charities, churches, local organizations, etc etc etc, but that's just me.)

Now explain in full detail why the FEDERAL level of government should be doing it, instead of the state and local levels, which have no 10th Amendment violations to deal with. THIS is the crucial point that must be made, IMHO.

[nascarnation]

Let me be the first to play the race card.

How many blacks and Mexicans are in these “winning growth” countries with lots of entitlements?

[Sopater]

Well, I wouldn’t equate “faithfully judging” the poor with a mandate to support the poor. This scriptures (Prov 29 and Jer 22) clearly states the poor are not to be deprived of justice just because of their financial status. The Daniel reference is a personal plea to the king of Babylon, hence his personal rebuke in v. 28-33.

“We the people” have individual responsibilities to show charity. I don’t believe that I obtain one single jewel in my crown for paying taxes that I am required by law to pay, nor for voting to raise taxes on my wealthier neighbors. The latter issue is addressed in a more commonly known verse.

Thou shalt not covet thy neighbor’s house, thou shalt not covet thy neighbor’s wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbor’s. (Exo 20:17)

[DannyTN]

"The Apostle Paul wrote several times in his epistles that coveting the wealth of others is idolatry. (e.g. Ephesians 5:5) He stated clearly that no such person can attain eternal life.'

So when a blind man begs at the temple gate, or an orphan begs, is that coveting and idolatry?

Clearly there are people who abuse the system and are guilting of laziness, coveting, theft and idolatry. But I don't think that applies to most people who would support safety nets, or even most people who use them.

[DannyTN]

"The Apostle Paul wrote several times in his epistles that coveting the wealth of others is idolatry. (e.g. Ephesians 5:5) He stated clearly that no such person can attain eternal life.'

So when a blind man begs at the temple gate, or an orphan begs, is that coveting and idolatry?

Clearly there are people who abuse the system and are guilting of laziness, coveting, theft and idolatry. But I don't think that applies to most people who would support safety nets, or even most people who use them.

[DannyTN]

I wouldn’t think you would get jewels in your crown for paying taxes either. But the length of a democracy/republic’s reign might well depend on how we vote and what actions we take as a democracy/republic.

[Timocrat]

I'm wondering if anyone can poke holes in this chart.

The first hole i can spot is that the Social spending as a % of GDP is based on actual figures for 2000-2007 and Projections for 2008-2012. If you actually look at the figures from the OECD they only have projections for 2008-2012 so five of the thirteen years are projections. I haven't yet figured out how they have calculated "adjusted GDP growth"

[Sopater]

But the length of a democracy/republic’s reign might well depend on how we vote and what actions we take as a democracy/republic.

Absolutely, but trying to force the roll of the Church on the government, and allowing the government to usurp the roll of churches and families will have the opposite of the desired effect.

[DannyTN]

"1) The federal government should not be involved"

I'm not sure the Federal government is authorized by the constitution to be involved given the enumerated powers, but the reason the Feds are involved is that some states were dumping their indigents at the state line.

2) People will become dependent

Not if it's done right. I'm not saying it's done right now.

3) And, the taxpayer money will be stolen by politicians

Not if we elect trustworthy people and demand checks and balances. That statement is a condemnation of all government and all politicians, the logical consequence of which is anarchy, dissolving all government which results in Somalia.