Please share this video with everyone you know. It explains the “Rahn Curve,” which is a spending version of the Laffer Curve. Named after Cato 
Institute’s Richard Rahn, the Curve shows that modest amounts of government spending – for core “public goods” such as rule of law and protection of property rights – is associated with better economic performance.
But when government rises above that level (as it has in all developed nations), then more government is associated with slower growth.
What an informative video. I am helping with a gubernatorial campaign in OK this year, and this would be a great grassroots effort to get the truth out. Permission to use this video and a digital copy of the slides for reprint would be much appreciated.
The message of this video is powerful. To think that government was so limited right up to 1945 and that all of this lionizing of government is a very recent phenomenon. Sad and disturbing.
Thank you, Cato, for doing this research and sharing it with us.
[...] the right answer is, d) reducing government spending. After all, the evidence is very clear that excessive government slows growth by diverting resources from the productive sector of the economy. Sadly, the poll only allowed the three options. So I said “reducing taxes” since that [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. Socialism [...]
[...] but not least, this video reviews the theory and evidence for the "Rahn Curve," which is the notion that there is a growth-maximizing level of government outlays. Daniel J. [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is [...]
[...] Freedom Day only measures the direct and immediate impact of taxation. It doesn’t measure the overall burden of government. This chart from the Tax Foundation shows that the fiscal burden of government has jumped [...]
[...] Freedom Day only measures the direct and immediate impact of taxation. It doesn’t measure the overall burden of government. This chart from the Tax Foundation shows that the fiscal burden of government has jumped [...]
[...] Freedom Day only measures the direct and immediate impact of taxation. It doesn’t measure the overall burden of government. This chart from the Tax Foundation shows that the fiscal burden of government has jumped [...]
[...] Freedom Day only measures the direct and immediate impact of taxation. It doesn’t measure the overall burden of government. This chart from the Tax Foundation shows that the fiscal burden of government has jumped [...]
[...] Tax Freedom Day only measures the direct and immediate impact of taxation. It doesn’t measure the overall burden of government. This chart from the Tax Foundation shows that the fiscal burden of government has jumped [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] of the Rahn Curve. Named after my Cato colleague Richard Rahn and explained in the video below, the Rahn Curve is sort of a spending version of the Laffer Curve. Richard [...]
[...] For all intents and purposes, all this research shows that developed nations are on the downward-sloping portion of the Rahn Curve. Named after my Cato colleague Richard Rahn and explained in the video below, the Rahn Curve is sort of a spending version of the Laffer Curve. [...]
[...] For all intents and purposes, all this research shows that developed nations are on the downward-sloping portion of the Rahn Curve. Named after my Cato colleague Richard Rahn and explained in the video below, the Rahn Curve is sort of a spending version of the Laffer Curve. [...]
[...] For all intents and purposes, all this research shows that developed nations are on the downward-sloping portion of the Rahn Curve. Named after my Cato colleague Richard Rahn and explained in the video below, the Rahn Curve is sort of a spending version of the Laffer Curve. [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is [...]
[...] does matter, however, is that the American economy is burdened with a bloated public sector that is sapping the nation’s economic vitality. And this problem will get worse every year [...]
[...] does matter, however, is that the American economy is burdened with a bloated public sectorthat is sapping the nation’s economic vitality. And this problem will get worse every year because [...]
[...] Why am I only finding out about this today? Everyone should see this video. [...]
[...] DANIEL MITCHELL: The Rahn Curve: We All Know Government Is Too Big, But Here’s The Evidence. [...]
[...] We All Know Government Is too Big, but Here’s the Evidence « International Liberty. [...]
[...] does matter, however, is that the American economy is burdened with a bloated public sector that is sapping the nation’s economic vitality. And this problem will get worse every year [...]
[...] does matter, however, is that the American economy is burdened with a bloated public sector that is sapping the nation’s economic vitality. And this problem will get worse every year [...]
[...] does matter, however, is that the American economy is burdened with a bloated public sector that is sapping the nation’s economic vitality. And this problem will get worse every year [...]
[...] I cover a wide range of issues in this interview for Bloomberg Asia. My main theme, not surprisingly, is that government is too big. [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. Daniel J. [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] all, the federal government is too big, and the damage to the economy would still exist even if the deficit disappeared because $1 [...]
[...] we educate everybody about the Laffer Curve, we can then concentrate on teaching them about the equivalent relationship on the spending side of the fiscal ledger, the Rahn Curve. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] think I covered a lot of ground in about 10 minutes. The key message was that government is too big and that the only solution is to limit government so that it grows slower than the private sector. [...]
[...] may sound familiar, because it’s a description of the Rahn Curve, which is sort of the spending version of the Laffer Curve. This video [...]
[...] may sound familiar, because it’s a description of the Rahn Curve, which is sort of the spending version of the Laffer Curve. This video [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is [...]
[...] Reducing the burden of government spending to allow more efficient allocation of labor and capital. [...]
[...] they generally don’t live in Europe. Writing for the Australian, Professor Judith Sloan cites the Rahn Curve as she explains the need to reduce the size and scope of the public [...]
[...] Reducing the burden of government spending to allow more efficient allocation of labor and capital. [...]
[...] elaborate, this video discusses the Rahn Curve, which augments the data in the World Bank [...]
CORPORATE TAX RATE
Put it at 100% will make no difference if they get enough exemptionas to pay 1.5% of gdp. We rank #2 in OECD on Least Tax as % of GDP on corporations
How can one justify—Corporations get more Exemptions than they Pay in taxes????????????????????
Since 1980, our tax book has been a Christmas Tree for goodies for Rich and Corporations
Their tax rates have, steadily, gone down down down
.We borrowed 14,00 Billion that took rich to ultra rich and corp ceos etc to ultra rich..Tme to tax them to get a pay back.
Jobs Creators My rear end. 31,000 net new jobs per month in Bush 8 years.
Lowest since Hoover.
In 20 of 3 Repub presidents since 1980 we got 90,000 per month compared to Carter Clinton 222,000. Rich got huge tax breaks under the 3 and only 99,000
per month.
Republicans die for tax cuts for rich.
Yet since 1921. Spend and Borrow R presidents got 800,000 jobs per year compared ot Tax & Spend Pay your way D presidents 1,800,000 per year
Cut those taxes cut those jobs.
Response to Heritage article on cost of poor
Anti-Christ Anti America????
Help the poor ultra rich—Shaft the poor poor
Have you ever told both sides? Rich and Poor. Revenues/Expenditures Mismatch?
No one can deny our programs need change including those that enrich the already ultra rich.
The poor get peanuts the Rich get Caviar. Try Top Down on Expenditures.
Who gets our tax revenues.
Since 1980. our Tax Book has been a Christmas Tree loaded with goodies for Rich and Big corporations like GE.
Is it not shameful to you that the Rich & Corporations get more in Exemptions than they pay in taxes??? Does that not bother you?
Does it not bother you that top 50% get 87% of individual Income and pay 12.5% tax rate or 10% of total income????
Does it not bother you that 10% own 73% of net wealth.83% financial wealth and get 50% of income
It would bother Jesus Christ!
Does it not bother you that our rankings in OECD nations are:
#2-Least taxed as percent of GDP—Taxed 30% of GDP in federal-state-local taxes
#2-Least taxed corporations as % of GDP. 35% top rate could be 100% no one pays it
#4 on Inequality—In 1980, in bottom 5.
It would bother Jesus Christ!!
1980 to 2009 our Tax Book has been a Christmas Tree loaded with goodies for Rich and Large corporations
Think not? Then explain how they get more exemptions than they pay in taxes?
Explain how from 1945 to 1980 bottom 20% gained more, percentage-wise, than top 1% in Wealth?
Explain how the top 50% get 87% of total individual income and pay a 12..5% Tax Rate which is actually about 10% of Total Income?
Explain this AWFUL—How 10% get 73% of net wealth ; 83% of financial wealth; 50% of individual income ; pay 18.5% tax rate or “about” 15% of total income???
Explain how 80% got the big shaft since 1980????
Yes! All programs need my Top Down Cost Reduction Program that has saved millions for businesses.
Top Down will show a picture that you refuse to acknowledge or expose.
I like Heritage but hate deceptions. Your writers may believe, sincerely, what they publish yet that does not make it truth.
When will you tell of the Disaster of Reagan, Bush I and Bush II?
Took 600B budget to 3500B (less Lord Bill litsy bitsy) in 20 years
Took 1000B Debt (after 200 years)to 10,000B in 20 years
Took surplus to 1400B Deficits as far as eye can see
Created 99,000 net new jobs per month to Carter + Clinton 222,000
Initiated our involvement in 10 foreign conflicts
Smashed our Housing Industry
Smashed the World Financial System with unregulated Casino Derivative of America.
Lied us into Two horrid wars
Took us from most admired nation to Big Bully hated by1500 Million Muslims and lost respect in most nations. Started our Decline into End Of American Empire.
Clarence swinney-old87 uglymeanhonest political historian Lifeaholics of America
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. Daniel J. [...]
[...] moral of the story is simple. A country should have a small public sector and a pro-growth tax system, but that’s only 20 percent of the answer. Prosperity requires [...]
[...] moral of the story is simple. A country should have a small public sector and a pro-growth tax system, but that’s only 20 percent of the answer. Prosperity requires good [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] right approach, needless to say, is libertarianism. Small government and low tax rates are the pro-growth, pro-freedom recipe. That’s the one part of the Table [...]
[...] Last but not least, the final video looks at the research about the growth-maximizing size of government. [...]
[...] My motivation was to help people understand that America’s fiscal problem is excessive government spending, not red ink. Deficits and debt are undesirable, of course, but they are best understood as symptoms. The underlying disease is a bloated federal budget that diverts resources from the productive sector of the economy and subsidiz…. [...]
[...] I do know that America’s fiscal problem is a government that is far too big. You don’t solve the problem with more taxes, just as you don’t cure alcoholics by [...]
[...] I do know that America’s fiscal problem is a government that is far too big. You don’t solve the problem with more taxes, just as you don’t cure alcoholics by giving them [...]
[...] I do know that America’s fiscal problem is a government that is far too big. You don’t solve the problem with more taxes, just as you don’t cure alcoholics by giving them [...]
[...] 2. It’s impossible to have good tax policy if government is too big. [...]
[...] There are several semi-permanent fiscal policy fights in Washington, most of which somehow are related to the big issue of whether government should be bigger or smaller. [...]
[...] are two simple answers. First, enact a simple and fair flat tax to keep rates low. Second, shrink government to its proper size, which will automatically reduce waste and limit opportunities for [...]
[...] it often hurts the economy when government spends money. Sort of a perverse 2-for-1 special (though “Rahn Curve” analysis does show that some types of spending – on core public goods – is correlated with better economic [...]
[...] are two simple answers. First, enact a simple and fair flat tax to keep rates low. Second, shrink government to its proper size, which will automatically reduce waste and limit opportunities for [...]
[...] it often hurts the economy when government spends money. Sort of a perverse 2-for-1 special (though “Rahn Curve” analysis does show that some types of spending – on core public goods – is correlated with better economic [...]
[...] is that most bureaucrats get overpaid for position that shouldn’t even exist. If we shrink government to its proper size, the problem is mostly resolved. Rate this: Share [...]
[...] Another problem is that people assume that tax rates should be set at the revenue-maximizing level. I explained back in 2010 that this was wrong. Policy makers should strive to set tax rates at the growth-maximizing level. But since a growth-generating tax is about as common as a unicorn, what this really means is that tax rates should be set to produce enough revenue to finance the growth-maximizing level of government – as illustrated by the Rahn Curve. [...]
Excellent video. Thank you Mr. Mitchell.
One argument not made by Mitchell, is that the more you have to pay to government for a product, the more it costs. And countries that have lower burdens of government, are able to product goods/services at lower costs to consumers, as a result. Thus, lower taxes is better for consumers and producers.
To me the best government spending level is 0. But that assumes we won’t have criminals or foreign enemies. Thus, limiting government to just protecting our freedoms, provides the best opportunities for prosperity. The alternative, is to pay government (instead of a company in a free market) for goods/services. And since when has government produced anything but war competitively?
Government produces cataract surgery in North Korea, but citizens with cataracts there go blind for lack of it (but Kim Jong can get it, being the 1% leader). That’s how well government produces.
[...] are too onerous and unfair. If I somehow manage to bring government down to 10 percent of GDP, as the Rahn Curve suggests if we want to maximize prosperity for the American people, then I’ll have the luxury of worrying about the moral legitimacy of a [...]
[...] are too onerous and unfair. If I somehow manage to bring government down to 10 percent of GDP, as the Rahn Curve suggests if we want to maximize prosperity for the American people, then I’ll have the luxury of worrying about the moral legitimacy of a [...]
[...] to be distracted by humor and would rather focus on reckless and wasteful spending, then you should watch this Rahn Curve video to understand the economic damage of big government. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] to be distracted by humor and would rather focus on reckless and wasteful spending, then you should watch this Rahn Curve video to understand the economic damage of big government. Like this:LikeBe the first to like this post. By Everette Hatcher III, on April 23, 2012 at [...]
[...] to be distracted by humor and would rather focus on reckless and wasteful spending, then you should watch this Rahn Curve video to understand the economic damage of big government. Like this:LikeBe the first to like this post. By Everette Hatcher III, on April 23, 2012 at [...]
[...] obviously far beyond the growth-maximizing size of government, which means European nations – on average – would be condemned to permanent economic [...]
[...] And once we educate everybody about the Laffer Curve, we can then concentrate on teaching them about the equivalent relationship on the spending side of the fiscal ledger, the Rahn Curve. [...]
[...] the most important thing we need to understand is that bloated government is our main problem. If we had a limited federal government, as our Founding Fathers envisioned, it would be almost [...]
[...] the long run, of course, the goal should be to shrink the overall burden of government to its growth-maximizing level. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is [...]
[...] elaborate, this video discusses the Rahn Curve, which augments the data in the World Bank [...]
[...] the long run, of course, the goal should be to shrink the overall burden of government to its growth-maximizing level. Daniel J. Mitchell • May 8, 2012 @ 11:19 am Filed under: Finance, Banking [...]
[...] I wrote about him last year. We clashed the most, arguing about everything from tax havens to the size of government. Interestingly, we both said nice things about Sweden, but I was focusing on policies such as [...]
[...] One reason they have good tax policy is that the burden of government spending is relatively modest, usually less than 20 percent of economic output (maybe their politicians have heard of the Rahn Curve!). [...]
[...] be the first to admit that infrastructure spending is less damaging that social welfare spending, but it is a bit of a fantasy to assume that there are lots of high-return projects languishing on [...]
[...] This is my message in this video on the Rahn Curve. [...]
[...] This is my message in this video on the Rahn Curve. [...]
[...] This is my message in this video on the Rahn Curve. [...]