Rik Schneider Online

Tuesday, January 10, 2012

"Big Government Is Not Stimulus: Why Keynes Was Wrong": How to Stimulate The Economy



Can Government stimulate the economy which I believe is the question here and broadly what is the Role of Government. Yes it can and it has by doing things like Tax Cuts and encouraging Consumer Spending and things like Infrastructure Investment. The 2009 Recovery Act which of course wasn't perfectly designed and could've been designed a lot better. Did Stimulate the Economy, we were losing around 7% in GDP Growth in early 2009 and losing around 700K jobs per month. With the Unemployment Rate going above 9% which we just got under in December, 2011. To by the Summer of 2009 we broke out of the "Great Recession" to the point. That the economy started growing again and we grew around 7% in the Fourth Quarter in 2009. We started creating jobs again net by early 2010 but of course haven't yet fully recovered from the "Great Recession". But Big Government with high Tax Rates and an expansive Welfare State is not the answer to a strong economy long term. Just look at the European Union, Scandinavia right now that reorganizing their Welfare States and cutting back Public Benefits. As well as the United Kingdom and Canada that have been cutting their Tax Rates. All these countries, even though they all have Conservative Parties, in Canada, Britain, and France they all have Conservative Governments. Are all basically Socialist Democracy's. The type of Democracy that American Progressives would like to build in America.

What we really should do in America and not just during Political Campaigns, is to have a real National Debate. About the Role of Government in America and include everyone on the Political Spectrum. Let Liberals like myself make their case for Limited Government, let Conservatives argue for their version of Limited Government. Which is different, Libertarians argue for Small Government which is even smaller. Progressives argue for their version of Big Government and Independents argue for what they would call Responsible Government. And take a long look at which Version of Government is Constitutional or the most Constitutional and what would work the best. And go from there, instead of screaming at each other all the time. And constantly arguing to the point that the country doesn't like anyone who's in charge. And then at the end nothing or very little gets done and we are stuck in the same place we've been in. For over ten years now, how do we destroy the other side and get all of the power. To pass our agenda and then how do we keep all of the power and stay in power.

Government Stimulus when designed and executed properly, is the answer of last resort. When no one else has the resources to spend the money to get the economy going again. But should never be the first result or relying on Big Government to take care of the country . That becomes very expensive and its a lot more efficient to empower people to take care of themselves. Because then they start paying taxes and supplying the resources that Progressives want. To fund their Big Government.