On the front of today’s New York Times business section is a remarkable—or should I say remarkably unremarkable—news article whose entire premise, unchallenged in the course of 1,341 words and input from 10 sources, is that more government spending is a very good thing because it leads to more government jobs and therefore helps the economy. Hooray!
Increased Government spending does in fact cause growth in GDP — because Government spending is a *component* of the GDP. Which is like saying “I made 80,000 last year, but I ran up 20,000 in credit card debt, therefore, I made 100,000 dollars last year.”
But, according to the economists at the New York Times, confiscating the earnings of productive people and lavishing them on the unproductive via a Government intermediary is the ideal path to economic growth and prosperity and Government can grow indefinitely without any adverse consequences.
I can’t shake the feeling that this system may have been tried elsewhere.