"Rapid expansion of government, more than any market factor, appears to be responsible for flagging economic dynamism. Government spending has not only failed to arrest the economic crisis, but also—in many countries—seems to be prolonging it. The big-government approach has led to bloated public debt, turning an economic slowdown into a fiscal crisis with economic stagnation fueling long-term unemployment."
Admittedly, the Heritage Foundation and the WSJ are traditionally very conservative but I believe their findings cannot be attributed alone to their natural want to "stick to their old ideas." There is research and truth behind what they say. The expansion of government that they mention was largely part of a reaction to the global financial crisis. Governments, especially the United States, tried to fix the problem of a financial downturn by pouring billions of tax dollars into the economy. The results were minimal.
Liberals, at their most outspoken, accuse the GOP of "not caring enough about poor people." If the above findings are correct, than the Obama and Liberal plan of spending-to-fix-the-economy has led to not more wealth for a greater number of people but more unemployment and and more poverty overall.
One has to be smart when attempting to fulfill such overarching goals as "caring about poor people" and "eradicating poverty." Handing out welfare, in the form of stimulus packages and general big-government spending, as it seems many of the Western countries in recent years have done on a large scale, appears not to be the answer. If it were, the economy would be fixed by now. Let's hope the Index will serve as a warning and encourage our leaders to reverse their policy (or get out). Here's to Mitt Romeny 2012....
There can be little doubt that governments across the globe are at fault in the financial crisis which still hurts us today. The findings of the Heritage Foundation and the Wall Street Journal are hardly surprising – because of their political orientations and because there is some truth to their findings. After all, it was the Greek government that hid huge deficits, not the country’s citizens.
ReplyDeleteThat said, I’m not sure I completely understand your conclusions. As the quote says, their findings refer to “many countries”, thus not all. There are countries around the world where government “has kicked in” over the past many years, and some of those economies weathered the crisis much better than the US, Greece or France (or the other many countries that recently had their rating downgraded – see Dominika’s blog). China is charging ahead, affected but nonetheless pushing through the crisis with impressing growth. Many European countries have not seen quickly rising unemployment rates despite heavy government interventions like the 700-Billion Stimulus here in the US. My point is this: big government isn’t (with the criteria you provided) unequivocally bad. It can work. The question is how government works best – HOW does government get involved. In times of plenty that may be a very minimal role, but during times of crisis evidence of shows that government intervention CAN (but far from always does) help. Let’s not vote for Romney simply because he doesn’t like “big government” but instead because we believe he will help find where government can be helpful and where it can’t.