Why Government Spending Does Not Stimulate Economic Growth

heritage foundation ^

[newbie2008]

In a throwback to the 1930s and 1970s, Demo­cratic lawmakers are betting that America's economic ills can be cured by an extraordinary expansion of government. This tired approach has already failed repeatedly in the past year, in which Congress and the President:

1. Increased total federal spending by 11 percent to nearly $3 trillion;

2. Enacted $333 billion in "emergency" spending;

3. Enacted $105 billion in tax rebates; and

4. Pushed the budget deficit to $455 billion in the name of "stimulus."

Every one of these policies failed to increase eco­nomic growth. Now, in addition to passing a $700 bil­lion financial sector rescue package, lawmakers have decided to double down on these failed spending pol­icies by proposing a $300 billion economic stimulus bill. Even though the last $455 billion in Keynesian deficit spending failed to help the economy, lawmak­ers seem to have convinced themselves that the next $300 billion will succeed.

[Gondring]

How loudly were they saying this for the past 8 years?!

[LifeComesFirst]

Alas, as long as there are career politicians instead of citizen politicians, there will be politicians who want to look as if they are “doing something” about recessions, which automatically creates a market for Keynesian economists—no matter how often their ideas are debunked. In government, as in academia, ideas don’t have to actually work to survive, they just need people to believe in them.

[Smokin' Joe]

Economic growth? No more than a change machine that gives you 65 cents for every dollar you put in on a good day.

[Post Toasties]

Genius is rare - stupidity goes on forever, and it’ll be particularly concentrated in Capitol Hill and the White House next go around.

[Post Toasties]

Genius is rare - stupidity goes on forever, and it’ll be particularly concentrated in Capitol Hill and the White House next go around.

[PressurePoint]

"Gov­ernment spending 'stimulus' merely redistributes existing income, doing nothing to increase produc­tivity or employment, and therefore nothing to cre­ate additional income."

"Economic growth results from producing more goods and services (not from redistributing existing income)"

This article is an excellent compendium of virtually every argument I've ever had with a liberal. Arguments that inevitably end with accusations that I'm either heartless, greedy, racist, or ignorant.

I'm convinced that either Conservatives have some genetic predisposition toward fiscal comprehension, or liberals have an innate perception of economics analogous to abstract art or a hallucinogenic trip.

[DiogenesLaertius]

Guys, this is GOOD news. Obama will think this will work and attempt to buy votes by including a small “middle-class” tax cut in his stimulus package.

The economy is about to go into a worse recession than in 1981-82 when the Gipper suffered through his lowest sub-40 approval ratings. But the economy is not going to rebound anywhere near what it did during 83 and 84 by the end of Obama’s term.

With productivity numbers way down (the tech boom is over), demand down permanently worldwide (no more easy financing), and a looming entitlements fiscal bomb; Obama is poised to be the 2nd coming of Jimmy Carter.

Lets hope he and his cronies in the mainstream media can’t cover his ass. That way Jindal or Romney can go in and fix things in 2012.

[fightinJAG]

You can’t stimulate confidence.

[fightinJAG]

I'm convinced that either Conservatives have some genetic predisposition toward fiscal comprehension, or liberals have an innate perception of economics analogous to abstract art or a hallucinogenic trip.

Margaret Thatcher once said something along the lines of, "To get your policies right, you first have to get your understanding of human nature right."

In my view, that goes a long way toward explaining why liberals cannot accept economic facts. (Or other realities.)

[fightinJAG]

Won’t matter how bad things are if, by 2012, more than 50% of Americans are on the dole (as is predicted).

They won’t be voting to cut off their own gravy train, and they certainly won’t be interested in any even semi-Republican message of “limited government.” Ha!

As Rush always says, “You never win by losing.” And sometimes you lose REALLY BIG and PERMANENTLY by losing.

This may be one of those times.

Not only will the coming welfare majority not vote for rejecting socialism, the Rats will be yelling that the reason things are so bad is that they have not sufficiently vanquished their opponents, their opponents’ ideas, and other “obstacles.”

IOW, it will be the basis for arguing for even more socialism, as has always, inexorably been the case in history.

It’s not pretty.

[ari-freedom]

they will if there is major inflation.

[all the best]

Only a fool or a child could possibly think that flooding the economy with newly printed money could possibly produce more prosperity. Of that were the case we could just print everybody a truckload an we could all move to Beverly Hills. All government interference in the economy is an attempy to cheat reality. It’s a game of let’s pretend.

[JerseyHighlander]

We are way past 50% leeching already.

40% of Americans pay no Federal income tax.

Obama and the Dem supermajority are going to Nationalise the Healthcare industry.  Obama and the Dem supermajority are going to further fund the education industry.

Industry

[View Chart 4  Chart 5]

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Service-providing industries. The long-term shift from goods-producing to service-providing employment is expected to continue. Service-providing industries are expected to account for approximately 15.7 million new wage and salary jobs generated over the 2006-2016 period (Chart 4), while goods-producing industries will see overall job loss.

Education and health services. This industry supersector is projected to grow by 18.8 percent, and add more jobs, nearly 5.5 million, than any other industry supersector. More than 3 out of every 10 new jobs created in the U.S. economy will be in either the healthcare and social assistance or public and private educational services sectors.  from http://www.bls.gov/oco/oco2003.htm

Outside the private education sector, which will be reserved for the elite socialist cadre members, the future growth in the US economy is going to be from sectors that will survive and thrive on government largesse.

On top of this, the Democrats will import and normalize the illegal immigrant population in the gateway states, permanently positioning the Democrat party to control the Presidency and the Senate.  15 million new Democrat voters once blanket amnesty is passed next year will be the final nail in the coffin.

 

 

[fightinJAG]

Good info! Thanks. Sort of. ;)