Monday, June 27, 2016

Bigger Government Bad For Business

There is no doubt that Bigger Government is bad for business. In fact, bigger government grows through higher taxes and other revenue generation and more regulations at the expense of the Private Sector. We have clearly seen this during the Obama years as taxes and regulations have expanded dramatically resulting in higher government spending and very slow economic expansion of 2% or less each year that is not keeping up with population growth. Local, State and Federal Government spending now comprise nearly 40% of Gross Domestic Product about the highest in American history.  Of the roughly $15 Trillion US economy, government is responsible for about $6 Trillion in spending for goods and services. To make these purchases, government at all levels confiscates private sector monies in the form of income taxes, all sorts of fees and fines and further borrows billions more to fund government operating and other expenses. This is money taken out of the economy that is not available in the Private Sector to invest monies to create jobs.   It really is that simple.

Many economists have stated that the best economic growth in the US occurs when total government spending is around 25 - 27% of GDP. That is about 17-18% Federal and perhaps 10% Local and State. Even though the American people are experiencing a very high tax burden and regulations that are killing jobs and it has led to about 95 million people out of workforce, the lowest labor participation rate in four decades and the highest poverty rate since Jimmy Carter was President, Progressives call for even higher taxes and more job killing regulations.

Apparently, they never learned the lessons of Economics 101, or just plain common sense.  In order for the US economy to grow at the 3% or more a year, the rate needed to experience any kind of real economic vitality in our country, we must cut taxes and regulations dramatically. Just doing more of the same will lead to the same dismal economic results we have seen since the Fiscal Collapse in 2008-09. We also have to free up the Energy Sector to make energy cheaper and cleaner to raise the standard of living in the United States. This is not brain surgery. Government has to get out of the way and allow the Private Sector to do what is does best and that is to create economic growth and jobs.  As a side note, Big Government is also a threat to our Freedoms. 


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