It is simple really… less, not more, public sending helps the economy. What is so hard to grasp about that? When the government taxes, it allocates resources in a way that would not have otherwise have occurred (and if it would have occurred like that, then why is that aspect of what government does being done by government at all?). If the government had not taken those resources and allocated them, the capital would not have just sat under a mattress… it would have gone elsewhere: that is what capital does.
So when the government proudly points to some wonderful things it has built and the alleged economic benefits they will bring, what you do not see is what that self same capital would have done if the state had not appropriated it from its previous owners… what they would have done, what they would have built.
So when Gerard Baker at the Financial Times says Bush may have harmed the US economy with his tax cuts, rather than saying he may have harmed the economy by not reducing spending, he is in effect saying that it is only deficits, rather than government spending itself, that hurts economies. By saying High-Tax-Tom Daschle has better economic policies, that must mean that government spending is actually better for an economy than private spending. How does that work? That must be why the many nations whose governments appropriate more of their national resources for spending are wealthier than the United States, you know, nations like…er…um…ah…
