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    It’s the Spending - Stupid

    08/08/2011

    Personal Freedom and Power 103:  Possessions (Money and Property)

     “….private property, production, and voluntary exchange … are the ultimate sources of human civilization.”  Hans-Hermann Hoppe

    Utilizing possessions greatly advances every person’s opportunities to investment their time, intellect, labor and money. This fosters inspiration and resourcefulness, and propels commerce, science, art and charity.  Civilization advances. 

    It’s the Spending - Stupid

    The federal budget has increased by 16% over the past two years.  Health and Human Services has increased by 22%.  Many government agencies have increased by 50%.  Edward Lazear of the Hoover Institute writes in the  lWall Street Journal:

    The sum of 11 other agencies, such as the Departments of Agriculture, Education and Labor, which combined account for more annual spending than Defense, experienced an increase of more than 50% over the two-year period. Some of the budget increases, like those associated with unemployment insurance, should disappear when the economy rebounds, but much of the addition is permanent and is reflected in the president's projected future budget numbers.

    High debt and high taxes decrease investing in the economy.  In fact, the federal government is sucking money away from private investors and entrepreneurs.  Thus the economy stagnates or declines.  Lazear:

     Most economists believe that high debt and high taxes each contributes to slow economic growth, which hurts workers both in the short and long run.

    A stagnate economy increases unemployment and limits wage growth.  Lazear:

    In the long run, wage growth suffers when GDP growth is weak. Labor productivity grows when technology advances as a result of capital investment, human or physical. But high taxes and the increased interest rates caused by high government debt reduce investment, which in turn impedes growth in labor productivity.

    Cutting government spending and reducing the debt will increase every American’s opportunity to invest their money, time and labor.  More people will be employed and wages will increase.

    As Han-Hermann Hoppe wrote: “….private property, production, and voluntary exchange … are the ultimate sources of human civilization.  For economic growth and personal freedom government spending must be reduced. 

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