Remember.......
We who live in free market societies believe that growth, prosperity and, ultimately, human fulfillment are created from the bottom up, not the government down. Trust the people. This is the one irrefutable lesson of the entire post-war period, contradicting the notion that rigid government controls are essential to economic development. The societies that have achieved the most spectacular, broad-based progress are neither the most tightly controlled, nor the biggest in size, nor the wealthiest in natural resources. No, what unites them all is their willingness to believe in the magic of the marketplace.
-Ronald Reagan-
posted by glenzo @ 11/17/2009 05:24:00 PM
2 Comments:
The closest world leader we have to Reagan is in Germany.
Thought this was interesting in economic terms:
“Merkel (German Chancellor) Vows to Cut Taxes Despite Rising Job Losses.” (In the Wall Street Journal.) There are two things to consider here:
First, is it too good to be true? These would actually be rational ways to deal with the current economic uncertainty.
Secondly, why would cutting taxes be a bad thing to do in Germany when job losses are rising?
Cutting taxes is a way to keep monies in the hands of the consumer, who just might spend it and enhance the economy. Cutting taxes is also a way to encourage small businesses to hire people, which just might be the answer to long-term job creation. Yet Merkel is being criticized for this sane longer-term economic stimulus proposal.
Her critics say. “Germany can’t afford the measures given its huge projected budget deficits,” according to the Wall Street Journal article. Maybe they think Germany can pull out of its financial quagmire by continuing to levy one of the highest tax rates in the world which got it to this place.
This is the phase where federal deficits, government spending, and taxes go up, followed by a stagnant, non-growth economy where recessions last longer and longer, and go deeper and deeper.
If you want to change the outcome, you need to change the policies that lead to it. Merkel is perhaps the first world leader who is attempting to do this.
Maybe Germany is a place to think about moving some of your money to.
(And away from the leader of the formerly free world.)
Governments can only redistribute wealth it has a very difficult time creating it. The redistribution process creates a new set of incentives that may not lead to a maximization of a nation's wealth. This is why the left always use words like fairness and justice when arguing for government intervention in economics.
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