analyticsbox | Nov 10, 2021
What does this have to do with economics?
The objective of an economic policy is to grow the economy, as much as possible. Why? Because a growing economy raises the standard of living for everyone.
The economy is not a fixed pie with limits, it is a growing, dynamic economy, with the right policies! Growth will slow or go backwards with the wrong policies. A growing economy makes us all richer and raises our standard of living. Does it matter if the rich get richer if at the same time, the middle and poor also get richer? No. The growing economy is the rising tide, and it lifts everyone. That should be the objective of economic policy.
So how do we grow the economy? See FactsNo Spin #16. It grows when the productive sector has capital to invest. (The productive sector is NOT the government, it is the private sector). It is pretty simple, the more we take from the private sector and give to the government, the slower we grow, and vice versa. A free enterprise/market economy needs investment capital to grow and increase output for the benefit of all.
That brings me to one of my favorite quotes from Sir Winston Churchill:
“The inherent vice of Capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.”
If we study the real world, we can easily demonstrate that this is true. The US has the highest standard of living in the world. We got there with limited government and a free enterprise/market economy.
Venezuela was the richest country in South America. In the late 1990’s they moved in a different direction, toward more redistribution, followed by more and more socialism including government confiscation of private businesses. We all know how that story ended, an economic catastrophe now under a military dictatorship, with the masses starving and inflation soaring.
This brings me to another of my favorite quotes from Thomas Sowell:
“If Socialist understood economics, they wouldn’t be Socialists.”
The Bottom Line
It is time to cut to the chase and stop listening to the nonsense coming from the ‘Political Elite’. If we want to improve the economy and standard of living for all Americans, we need to try good economic policy for a change. Pandering to the masses with programs that sound good but do not work, has serious negative impacts on people and stunts long term growth. We need to reduce government spending and giveaways, reform entitlement programs, stop taking from the productive, private sector and stop enlarging government, and finally -- balance the budget.
Let the private sector do its thing and produce - we will all be better off.
Understand Economics - then vote smart!