Nevertheless, the favorite justification for public expenditures these days is to “stimulate” the economy. The fact that $5 trillion in federal deficits during the president’s first four years in office didn’t create a buoyant economy doesn’t matter. If we would just spend a little more, everything would be wonderful.
So desperate is he to spend more that in his Tuesday speech he offered the GOP a deal: reform corporate taxes and have Uncle Sam spend, er, “invest,” the extra money to “create” jobs. Which is what his “stimulus” bill was supposed to do. Some Republicans responded positively, proving that they never learn.
Although the deficit has fallen significantly this year — revenues are significantly higher than expected — the Congressional Budget Office figures that the deficit will begin climbing again in 2015 on its way back to $1 trillion. There may never be a time when Washington will not be “stimulating” the economy.
Unfortunately, government cannot create self‐sustaining economic growth. Whatever the short‐term benefit of tossing taxpayer money down the rat holes closest to Capitol Hill, in the long‐term only productive investment will generate a sustained return. And productive investment is precisely the sort of outlay least likely to emerge from Congress hoping to bring down next month’s unemployment rate.
If all that is needed for prosperity is to increase the number of dollars in circulation, then it would make more sense to load up B‐52s with dollar bills and drop the cash all over America. Then everyone, and not just the politically well‐connected, could get some of Uncle Sam’s largesse. Moreover, people would have to work for their winnings by locating and collecting the bills. Encouraging people to wander the countryside looking for money could be viewed as an anti‐obesity initiative!
Rather than expanding government, a true economic “stimulus” initiative would promote the private sector. One of the best ways of doing so would be to reduce the regulatory burden on U.S. companies.
From the government’s standpoint, the cost of complying with government rules is a form of off‐budget spending, which diverts rather than creates demand. From the individual’s standpoint, regulation is an indirect tax, discouraging economic activity. When the government makes it more expensive to create businesses, develop products, expand operations, employ people, and market goods and services, there will be less commerce, meaning fewer and lower paying jobs. Cut regulation to encourage economic growth.
[pullquote]Rather than expanding government, a true economic “stimulus” initiative would promote the private sector.[/pullquote
Clyde Wayne Crews of the Competitive Enterprise Institute publishes an annual study of regulation, the least transparent form of government control. His latest “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State” is filled with bad news.
These days most Americans probably view Uncle Sam’s most important duty as that of sugar daddy — transferring money from taxpayers to basically everyone, ranging from corporations and labor unions to students and retirees. The national government has turned into a vehicle for most everyone to attempt to live at most everyone else’s expense. A system originally created to preserve liberty and limit government has turned into an institution by which the influential loot the productive.
However, nearly as important even if less visible is Washington’s regulatory role. Special interests have learned that they can use federal rulemaking to enrich themselves and/or impoverish their rivals. Doing so has the added advantage of disguising the cost to the public. Added to self‐serving regulations are the even more officious nanny‐state controls which increasingly appeal to the authoritarian liberals who so often end up in government.
The latter may be the worst. The traditional highwayman would relieve you of your cash, and then ride off leaving you unmolested in the future. Today’s officious regulator takes your money and sticks around, continuing to micro‐manage your life at your expense.
Increasingly there seems to be little that we do which lies outside of Washington’s control. Wrote Crews: