The bad kind: Government increases spending, increases tax rates, makes it hard to start businesses, increases regulations, and greatly expands the money supply. The private sector suffers, not the government. This kind is now being imposed in America and even more in many nations of Europe. Mr. Obama likes the European approach.
The good kind of austerity: Government cuts spending, fires bureaucrats, lowers tax rates, encourages business startups, reduces regulations, protects private property, encourages freedom, and limits money creation. This is the better kind. Austerity is suffered by the government. Everyone else flourishes.
At the center of U.S. power, the U.S. Congress’s budget scoring system disregards whether spending decisions are made by private sector or the government. To take an extreme, even if the scoring system assumed that government taxed 100 percent of everyone’s wealth and spent 100 percent of the nation’s economy, the system would project the same economic growth rate as if the government spent and taxed less and the private sector did most of the spending.
At the center of U.S. power, the U.S. Congress’s budget scoring system disregards whether spending decisions are made by private sector or the government. To take an extreme, even if the scoring system assumed that government taxed 100 percent of everyone’s wealth and spent 100 percent of the nation’s economy, the system would project the same economic growth rate as if the government spent and taxed less and the private sector did most of the spending.
Members of Congress who set up such a ridiculous model should be thrown out of office. Next year, with a bit of luck, perhaps they will be.
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