Can The Government Spend Your Money Better Than You?

Should a government balance its budget or borrow money to finance economic growth?  President Barack Obama has grown America's national debt to over 17 trillion dollars.  That's 17 thousand billion dollars.  Like all left-wing politicians, he claims that government spending produces a multiplier effect - a dollar spent produces more than a dollar's worth of economic output.  And here's a bonus- with today's low interest rates, the cost of borrowing and paying interest on the debt is at an all time low!  (They never talk about the day when interest rates return to normal levels or how many generations it will take to pay off the debt.)

Another left-wing assumption is that the government will spend the money more effectively than private sector businesses.  In my experience, both in and outside government, that assumption is simply false.  My view, of course, is only anecdotal.  So, take a look at "Large Changes in Fiscal Policy:  Taxes versus Spending", a study conducted by Harvard University professor, Alberto Alesina.  He analyzed "stimulus spending"  in industrialized countries from 1970 - 2007.  The result - increased government spending based on borrowed money actually reduced economic growth.  For more proof, look at the central planning system used by the Soviet Union under Communism.  The fact is the U.S.S.R.  collapsed under the dead weight of inefficient, wasteful system of government control.

An impartial investigation of any government with a balanced budget will show a healthy opportunity to reduce corporate and personal income taxes.  That's how to stimulate economic growth.