A couple of weeks ago, I proposed a “Golden Rule of Fiscal Policy” that was probably a bit too wordy.
Good fiscal policy exists when the private sector grows faster than the public sector, while fiscal ruin is inevitable if government spending grows faster than the productive part of the economy.
In some recent speeches, I’ve been experimenting with how to discuss this concept, and I’ve decided to be more concise.
I’ve also decided to be self-aggrandizing and call this Mitchell’s Golden Rule.
In some sense, this Golden Rule is a way of trying to help people understand why it is important to limit the growth of federal spending. And based on my recent speeches, it appears that linking government growth and private sector growth is very helpful.
Especially when I point out that the fiscal crises in nations such as Greece are the result of the opposite approach – letting the public sector grow faster than the productive sector of the economy.
Another advantage of the Golden Rule is that it doesn’t matter whether a nation has a budget deficit or a budget surplus. As I’ve explained on several occasions, the fiscal problem in most nations is that government is too big. Deficits and debt are just a symptom of that problem.
Following the Golden Rule doesn’t prohibit tax increases, but it certainly means they will be far less likely. Simply stated, tax revenues tend to track economic performance. So if the private sector is growing faster than the government, that means tax revenues will be growing faster than government spending. So why raise tax rates?
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P.S. Regular readers know that I’ve already tried to create a legacy with the not-so-famous Mitchell’s Law, which points out that politicians often propose to expand government to ostensibly solve the messes created by previous expansions of government.
But there’s nothing new about Mitchell’s Law. Great economists such as Mises wrote about how one misguided government intervention often becomes the excuse for another foolish government intervention. I simply coined a phrase in hopes of helping to popularize the notion that one government mistake is often a precursor for another government mistake.
I’m not aware, however, of anybody that has stated that the key to good fiscal policy is restraining government spending so it grows slower than the private sector. Hence, my narcissistic decision to label this concept Mitchell’s Golden Rule.
I would allow for a further refinement of your rule. . .
“The private sector should grow; The government should diminish.”
Good in principle, but the problem is that these things are difficult to measure.
Yeah…ln my opinion there needs to be further revisement:
Since you’ve already identified which of the two is “productive”…the goal should be to completely *eliminate* the unproductive. No reason to continue to squander resources. Too many problems that need to be solved productively.
Good. Intellectual property rights granted…
Now with the fundamentals better defined, can I build on it by deriving “Zorba’s Voter Suicide Index”?
“Zorba’s Voter Suicide Index” = The percentage of voters who believe that bypassing Mitchell’s Golden Rule is a shortcut to prosperity.
Shameless self-promotion ? … I like it
Might as well label it Mitchell’s Golden Whisltling in the Dark.
You might’ve figured that your English professor friend would want to critique your language, right?
So, change “should” to “must.” To me, “should” makes it sound like a matter of persuasion, almost as if you believe it to be a matter of morality. “Must,” OTOH, implies a matter of fate, or cause and effect. You should be nice to everyone. You must be nice to your boss.You should point the hose away from your face. You must pun the gun away from your face.
But then again, it’s your rule.
The Real Tax Burden
The late economist Milton Friedman pointed out a golden law of taxation. The real, current tax burden is government spending. Government borrowing (delayed taxes) is merely finance. Government spending directs current, real resources into wasteful projects, and denies a flow of resources to businesses which would like to produce more value than they consume (create a profit).
Replace “should” with “must”. “Should” is a suggestion with little or no force. How many other Laws reference “should”? “One should not commit murder” vs. One must not commit murder”.
Back when Kennedy took office and signed an EO permitting govt workers to unionize, 1 person in 19 worked in the public sector. For five decades the left has been growing the public sector (at the expense of all the productive sectors) as fast as it can (the better to offer cushy jobs to their loyal foot soldiers) to the point that we now have 22 million govt workers and 8 million in public education out of a total workforce of 150 million (although that’s been slipping since the Congress went Dem in 07).
The problem is that all jobs are not the same. All pay taxes, but jobs in the public sector get their salaries, taxes and benefits covered by tax revenue–they are tax consumers. Ultimately, workers in the private sector are the only true taxpayers–they have to earn a salary to pay the taxes to pay the salary to pay the income, property, sales and other taxes of a public worker.
Back then, we needed the taxes of 2 earners to cover the public employee. That left 16 out of 19 taxpayers to pay for everything else–Social Security, schools and libraries, satellites, highways and so on. That’s sustainable.
Now it’s down to 1 in 5, but public salaries and especially pensions are way up. Now it take 3 earners to cover the non-earner. That leaves 1 taxpayer in 5 to cover everything else, and it simply cannot be done. That explains how and why the Dems have saddled us with this enormous debt while feeding us the fictions that the size of government is nothing more than a matter of taste and that a job in the public sector helps the economy rather than burdens it. It also means any attempt to rev up the economy before this enormous structural problem begins to be dealt with is doomed.
What we must do in reasonably short order is shift 20-million jobs from the public to the private sector while also keeping taxes low and slashing regulatory oversight in order to rev up the economy to cover those jobs plus another 10+ million to take care of the current un- and under-employed. Can you say “privatize”? “Deregulate”? “Tax reduction”? “Drill, baby, drill”?
As Marco Rubio proclaims, what we need is more taxpayers… more *true* taxpayers, that is–earners in the private sector. Privatize ‘em. Cut ‘em. Whatever it takes. But we cannot run a $3.8B govt budget on top of $11.2B in private-sector earnings–it’s like asking a juggler to put down his clubs and toss anvils instead.
“Business Must Grow Faster Than Government” would have more punch.
Mitchell’s Golden Rule could be taken as a fundamental law of _prescriptive_ politics.
Unfortunately, the fundamental law of _descriptive_ politics is Parkinson’s Law, which one could rephrase as follows:
In the long term, the government always grows faster than the private sector.
The exceptions are state collapses due to revolution or foreign conquest.
This law was actually discovered by Ibn Khaldun (if not earlier) which means that it applied to early Islamic states.
It seems that it also applied to the Roman Empire, to most if not all Chinese dynasties, and to the European Renaissance states.
Unfortunately, so far there has been no American exceptionalism in this law.
There is already a proposed constitutional amendment already out there to impliment your rule. It requires that fed gov spending can never exceed 19% of GDP.
[...] the cartoon in this post is one of my best creations, probably surpassing Mitchell’s Law and Mitchell’s Golden Rule. GA_googleAddAttr("AdOpt", "1"); GA_googleAddAttr("Origin", "other"); [...]
[...] in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting the government grow faster than the private [...]
[...] in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting the government grow faster than the private [...]
[...] in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting the government grow faster than the private [...]
[...] Politicians in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting the government grow faster than the private [...]
[...] addthis_share = [];}Politicians in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting the government grow faster than the private [...]
[...] in a Single Picture: Politicians in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting government grow faster than the private [...]
We need NO govt, we need a just, lawful, legal, legitimate court where those presiding are forbidden to take any bribes
[...] be fair, a budget that allows federal spending to jump by 8 percent over the next four years would satisfy Mitchell’s Golden Rule. Barring an unexpected downturn, the private sector would be growing faster than the [...]
[...] 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. GA_googleAddAttr("AdOpt", "1"); GA_googleAddAttr("Origin", "other"); [...]
[...] have added one more message. If nations want a return to fiscal sanity, they need to follow “Mitchell’s Golden Rule,” which simply states that the private sector should grow faster than the [...]
[...] have added one more message. If nations want a return to fiscal sanity, they need to follow “Mitchell’s Golden Rule,” which simply states that the private sector should grow faster than the [...]
[...] have added one more message. If nations want a return to fiscal sanity, they need to follow “Mitchell’s Golden Rule,” which simply states that the private sector should grow faster than the [...]
I think the “golden rule” is incorrect – in that the word “should” should be replaced with “must”, since the government produces nothing and “must” depend on the private sector for support.
[...] the very least, this means following Mitchell’s Golden Rule so that the private sector grows faster than government. This would slowly but surely shrink the [...]
[...] from this new ECB research is that lawmakers – at the very least – need to follow Mitchell’s Golden Rule and make sure government spending grows slower than the private sector. Fortunately, that can [...]
[...] because we had a period, beginning a couple of years earlier, during which politicians followed Mitchell’s Golden Rule and restrained government spending so that it grew slower than the private economy. The 1997 [...]
[...] “golden rule,” they mean limits on deficits and debt. Instead, they should be following Mitchell’s Golden Rule, which requires that government spending grow slower than the private [...]
[...] I’ve been mulling this over and think I need to augment Mitchell’s Law and Mitchell’s Golden Rule with something like Mitchell’s Inverse Corollary of Taxation and Illegitimate Wealth. But [...]
[...] I’ve been mulling this over and think I need to augment Mitchell’s Law and Mitchell’s Golden Rule with something like Mitchell’s Inverse Corollary of Taxation and Illegitimate Wealth. But [...]
[...] I developed “Mitchell’s Golden Rule” to underscore the importance of restraining the burden of government so that, over time, it [...]
Hmmmm…If taxes were tied to GDP then it would be in the interest of tax spenders (politicians) to facilitate an increase which would expand their power and influence while at the same time creating an environment conducive to business and entrepreneurship. WOW! That was easy.
[...] as Spain!), the first priority is to figure out some way of moving back in the right direction by restraining government so it grows slower than the private sector. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] as Spain!), the first priority is to figure out some way of moving back in the right direction by restraining government so it grows slower than the private sector. jQuery('#lazyload_post_0 img').lazyload({placeholder: [...]
[...] But since government in the United States is now consuming more than 40 percent of GDP (about as much as Spain!), the first priority is to figure out some way of moving back in the right direction by restraining government so it grows slower than the private sector. [...]
[...] But since government in the United States is now consuming more than 40 percent of GDP (about as much as Spain!), the first priority is to figure out some way of moving back in the right direction by restraining government so it grows slower than the private sector. [...]
[...] a new award. But unlike my other awards, which are exercises in narcissism (Mitchell’s Law, Mitchell’s Golden Rule), I’m naming this award after former Senator Bob [...]
[...] a new award. But unlike my other awards, which are exercises in narcissism (Mitchell’s Law, Mitchell’s Golden Rule), I’m naming this award after former Senator Bob [...]
[...] The President’s budget, for instance, projects that the burden of federal spending will expand by less than 1 percent next year. That sounds like good news since it would satisfy Mitchell’s Golden Rule. [...]
[...] The President’s budget, for instance, projects that the burden of federal spending will expand by less than 1 percent next year. That sounds like good news since it would satisfy Mitchell’s Golden Rule. [...]
[...] The President’s budget, for instance, projects that the burden of federal spending will expand by less than 1 percent next year. That sounds like good news since it would satisfy Mitchell’s Golden Rule. [...]
[...] with that in mind, I’m going to do something similar to Mitchell’s Law and Mitchell’s Golden Rule. But in this case, I’ll actually give credit to someone else. As shown in the picture, [...]
[...] But after getting feedback, I realized that the rule was too wordy. So, after a bit of tweaking and market testing, I came up with “Mitchell’s Golden Rule.” [...]
[...] recognizing concepts rather than people, we also have “Mitchell’s Law” and “Mitchell’s Golden Rule.” Rate this: Share [...]
[...] In the same vein, but recognizing concepts rather than people, we also have “Mitchell’s Law” and “Mitchell’s Golden Rule.” [...]
[...] that I’m motivated to create another narcissistic poster (adding to Mitchell’s Law and Mitchell’s Golden Rule), which I’ll call Mitchell’s Guide to an Ethical Bleeding [...]
[...] growth, allowing the private sector to grow faster than the burden of government, thus satisfying Mitchell’s Golden Rule so that spending falls as a share of [...]
[...] In the same vein, but recognizing concepts rather than people, we also have “Mitchell’s Law” and “Mitchell’s Golden Rule.” [...]
[...] growth, allowing the private sector to grow faster than the burden of government, thus satisfying Mitchell’s Golden Rule so that spending falls as a share of [...]
[...] growth, allowing the private sector to grow faster than the burden of government, thus satisfying Mitchell’s Golden Rule so that spending falls as a share of [...]
In the long run, this rule leads to the complete elimination of government. Is that your goal?
[...] A couple of weeks ago, I offered some guarded praise for Paul Ryan’s budget, pointing out that it satisfies the most important requirement of fiscal policy by restraining spending – to an average of 3.1 percent per year over the next 10 years – so that government grows slower than the productive sector of the economy (I call this my Golden Rule). [...]
[...] A couple of weeks ago, I offered some guarded praise for Paul Ryan’s budget, pointing out that it satisfies the most important requirement of fiscal policy by restraining spending – to an average of 3.1 percent per year over the next 10 years – so that government grows slower than the productive sector of the economy (I call this my Golden Rule). [...]
[...] A couple of weeks ago, I offered some guarded praise for Paul Ryan’s budget, pointing out that it satisfies the most important requirement of fiscal policy by restraining spending – to an average of 3.1 percent per year over the next 10 years – so that government grows slower than the productive sector of the economy (I call this my Golden Rule). [...]
[...] The President’s budget, for instance, projects that the burden of federal spending will expand by less than 1 percent next year. That sounds like good news since it would satisfy Mitchell’s Golden Rule. [...]
[...] spending. He doesn’t mention that the solution is a spending cap (something akin to Mitchell’s Golden Rule), but that’s an implication of what he says. Moreover, I’m just glad that someone [...]
[...] Even though I favor radical reductions in the burden of government, I’ve made the point that good fiscal policy merely requires that government spending grow slower than the private sector – what I call Mitchell’s Golden Rule. [...]
[...] Even though I favor radical reductions in the burden of government, I’ve made the point that good fiscal policy merely requires that government spending grow slower than the private sector – what I call Mitchell’s Golden Rule. [...]
[...] Even though I favor radical reductions in the burden of government, I’ve made the point that good fiscal policy merely requires that government spending grow slower than the private sector – what I call Mitchell’s Golden Rule. [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve [...]
[...] need to come up with something akin to Mitchell’s Law and Mitchell’s Golden Rule, but in this case say something like “Politics is the art of redistributing to the corrupt [...]
[...] a basket case like Greece can put itself on a good path if it follows Mitchell’s Golden Rule and simply makes sure that government spending, in the long run, grows slower than the private [...]
Awesome and profound! Wisdom is not just knowing what is right, but communicating it in an efficient way that everyone can understand.
Bypassing your rule leads to fiscal corruption, bankruptcy and a dictatorship. Greece and Spain are losing their sovereignty to Germany, because they need someone to fund their unrestrained appetite. The United States is slowly losing their sovereignty to China.
[...] as Spain!), the first priority is to figure out some way of moving back in the right direction by restraining government so it grows slower than the private sector. Daniel J. Mitchell • February 9, 2012 @ 2:59 pm Filed under: General; [...]
[...] ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and [...]
[...] My message, by the way, was very simple. Higher taxes won’t work. The “growth” vs. “austerity” debate in Europe is really a no-win fight between those who want higher spending vs. those who want higher taxes. The only good answer is to restrain spending with…you guessed it, Mitchell’s Golden Rule. [...]
[...] My message, by the way, was very simple. Higher taxes won’t work. The “growth” vs. “austerity” debate in Europe is really a no-win fight between those who want higher spending vs. those who want higher taxes. The only good answer is to restrain spending with…you guessed it, Mitchell’s Golden Rule. [...]
[...] means that policy moves in the right direction when government grows slower than the private sector, as it did under Reagan and [...]
[...] than the private sector (with the kind of humility you only find in Washington, I call this “Mitchell’s Golden Rule“). The entitlement reforms in the Ryan budget would be a good start, along with some [...]
[...] means that policy moves in the right direction when government grows more slowly than the private sector, as it did under Reagan and [...]
[...] has violated Mitchell’s Golden Rule, letting government spending grow faster than the productive sector of the [...]
[...] Golden Rule of fiscal policy is that government spending should grow slower than economic output. Nations that follow that rule [...]
[...] Golden Rule of fiscal policy is that government spending should grow slower than economic output. Nations that follow that rule [...]
[...] readers know about Mitchell’s Golden Rule, which is the simple – but essential – notion that the burden of government spending [...]
[...] than the private sector (with the kind of humility you only find in Washington, I call this “Mitchell’s Golden Rule“). The entitlement reforms in the Ryan budget would be a good start, along with some much-needed [...]
[...] does create jobs? I explain we need to shrink the burden of government and I cite my favorite Golden Rule about the importance of making sure the productive sector of the economy grows faster than the [...]
[...] – as I explained in my post about Cyprus – that bad things happen sooner or later if government spending grows faster than the economy’s productive sector. Rate this:Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike [...]
[...] – as I explained in my post about Cyprus – that bad things happen sooner or later if government spending grows faster than the economy’s productive sector. Daniel J. Mitchell • July 11, 2012 @ 1:53 pm Filed under: Government and [...]
15 years after I left, people at my company still quote Mason’s Rule: All problems are caused by solutions.
[...] Even though I favor radical reductions in the burden of government, I’ve made the point that good fiscal policy merely requires that government spending grow slower than the private sector – what I call Mitchell’s Golden Rule. [...]
[...] Golden Rule of fiscal policy is that government spending should grow slower than economic output. Nations that follow that rule [...]
[...] to grow faster than the government. I’ve humbly decided to refer to this simple principle as Mitchell’s Golden Rule, and have pointed out that bad things happen when governments violate this common-sense [...]
[...] to grow faster than the government. I’ve humbly decided to refer to this simple principle as Mitchell’s Golden Rule, and have pointed out that bad things happen when governments violate this common-sense [...]
[...] to grow faster than the government. I’ve humbly decided to refer to this simple principle as Mitchell’s Golden Rule, and have pointed out that bad things happen when governments violate this common-sense [...]
[...] http://danieljmitchell.wordpress.com/2011/10/30/mitchells-golden-rule/ [...]
[...] does create jobs? I explain we need to shrink the burden of government and I cite my favorite Golden Rule about the importance of making sure the productive sector of the economy grows faster than the [...]
[...] the CALPERS report that said that they had 1-year return of only 1%, sequestration, and Mitchell’s Golden Rule. For those unfamiliar with Mitchell’s Golden Rule it states that “the private sector should [...]
[...] few comments on the debate. I channel the wisdom of Mitchell’s Golden Rule by saying the most important goal is restraining the growth of federal [...]
[...] I’ve been calling it Mitchell’s Golden Rule, but I couldn’t bring myself to be that narcissistic and self-aggrandizing on the [...]
[...] I’ve been calling it Mitchell’s Golden Rule, but I couldn’t bring myself to be that narcissistic and self-aggrandizing on the nation’s most [...]
[...] the burden of government spending grows slower than the economy’s productive sector (i.e., Mitchell’s Golden Rule), then deficits and debt fall. To be blunt, if you cure the disease, the symptoms automatically [...]
[...] I agree with much of the column, particularly the credit to the Tea Party and the indirect reference (“restraining governments that were growing far more rapidly than the private economy”) to Mitchell’s Golden Rule. [...]
[...] in Slovenia where I just finished indoctrinating educating a bunch of students on the importance of Mitchell’s Golden Rule as a means of restraining the burden of government [...]
[...] in Slovenia where I just finished indoctrinating educating a bunch of students on the importance of Mitchell’s Golden Rule as a means of restraining the burden of government [...]
[...] in Slovenia where I just finished indoctrinating educating a bunch of students on the importance of Mitchell’s Golden Rule as a means of restraining the burden of government [...]
[...] in Slovenia where I just finished indoctrinating educating a bunch of students on the importance of Mitchell’s Golden Rule as a means of restraining the burden of government [...]
[...] the burden of government spending grows slower than the economy’s productive sector (i.e., Mitchell’s Golden Rule), then deficits and debt fall. To be blunt, if you cure the disease, the symptoms automatically [...]
[...] Indeed, Canada is my main example when I explain why the United States should follow my Golden Rule of fiscal policy. [...]
[...] Indeed, Canada is my main example when I explain why the United States should follow my Golden Rule of fiscal policy. [...]
[...] concern is long-term trends. Politicians should be complying with Mitchell’s Golden Rule, which means reducing government spending as a share of GDP (to put it in terms that make [...]
[...] because neither candidate seems serious about following Mitchell’s Golden Rule, their assertions about middle-class tax relief almost surely are [...]
[...] Mitchell’s Golden Rule « International Liberty. Share this:TwitterFacebookLinkedInStumbleUponEmailPrintLike this:LikeBe the first to like this. This entry was posted in Dan Mitchell, Economics by michaelacummings. Bookmark the permalink. [...]
[...] in this interview for Fox Business News, is that nations get in trouble because they violate Mitchell’s Golden Rule. In other words, the burden of government spending climbs faster than the private sector’s [...]
[...] in this interview for Fox Business News, is that nations get in trouble because they violate Mitchell’s Golden Rule. In other words, the burden of government spending climbs faster than the private sector’s [...]
[...] about a “golden rule,” they mean limits on deficits and debt. Instead, they should be following Mitchell’s Golden Rule, which requires that government spending grow slower than the private [...]
[...] in this interview for Fox Business News, is that nations get in trouble because they violate Mitchell’s Golden Rule. In other words, the burden of government spending climbs faster than the private sector’s [...]
[...] Golden Rule of fiscal policy is that government spending should grow slower than economic output. Nations that follow that rule [...]
[...] maybe, with enough pressure, we can convince politicians to comply with my Golden Rule. After 12 years of excessive spending, it’s time to let the private sector grow faster than [...]
[...] than the private sector (with the kind of humility you only find in Washington, I call this “Mitchell’s Golden Rule“). The entitlement reforms in the Ryan budget would be a good start, along with some much-needed [...]
[...] fait l’avocat de l'approche Baltique depuis deux ans. Et il s'avère que ces nations ont suivi ma règle d'or pour de bons [...]
[...] My message, by the way, was very simple. Higher taxes won’t work. The “growth” vs. “austerity” debate in Europe is really a no-win fight between those who want higher spending vs. those who want higher taxes. The only good answer is to restrain spending with…you guessed it, Mitchell’s Golden Rule. [...]
[...] P.S. Don’t forget that revenues also are projected to rise dramatically over the next 10 years, even if the 2001 and 2003 tax cuts are made permanent. All that’s actually needed to balance the budget is modest spending restraint, restraining outlays so they grow by an average of 2.5 percent. In other words, good things happen if policy makers comply with Mitchell’s Golden Rule. [...]
[...] other words, the solution is to follow Mitchell’s Golden Rule. That’s the only way to make sure that the burden of government spending shrinks relative to [...]
[...] other words, the solution is to followMitchell’s Golden Rule. That’s the only way to make sure that theburden of government spending shrinks relative to [...]
[...] amazing how good things happen when you follow the Golden Rule of fiscal [...]
[...] amazing how good things happen when you follow the Golden Rule of fiscal [...]
Government must decrease that the productive may increase.
[...] P.P.P.S. There are some good lessons to be learned from other nations, as shown in this video. And if you pay attention to the details in that video, you’ll notice that the key to good fiscal policy is…drumroll please…following Mitchell’s Golden Rule. [...]
[...] P.P.P.S. There are some good lessons to be learned from other nations, as shown in this video. And if you pay attention to the details in that video, you’ll notice that the key to good fiscal policy is…drumroll please…following Mitchell’s Golden Rule. [...]
[...] amazing how good things happen when you follow the Golden Rule of fiscal [...]
[...] part of my self-serving efforts to promote Mitchell’s Golden Rule, I’ve been advocating for spending caps in the United States, and I’ve favorably cited [...]
[...] taxes usually are a substitute for the real solution of spending restraint (i.e., Mitchell’s Golden Rule). Politicians oftentimes refuse to reduce the burden of government spending because of an [...]
[...] taxes usually are a substitute for the real solution of spending restraint (i.e., Mitchell’s Golden Rule). Politicians oftentimes refuse to reduce the burden of government spending because of an [...]
reply to Dennis Edwall
“Good in principle, but the problem is that these things are difficult to measure.”
Wrong, a very simple measure already exists. It is the % of Gov spending vs GDP. It that measure goes up, it means gov is expanding faster than the economy. Right now under Obama it is grossly and historically bloated, at the highest level since WW2, at 24%. Under Bush it was a more healthy 20%, and under Clinton it was at a very healthy 18%. It should also be noted that when it was at 18% we had both a healthy economy and a balanced budget.
Romney proposed in his campaign to cut spending enough to bring it back to a healthier 20% in 4 yrs, but he lost. Now Obama is increasing taxes, with zippo in spending cuts, in the final fiscal cliff deal, and promisses more spending hikes to come. We were foolish enough to elect Obama, he will do nothing but spend, and when we follow Greece, the dems will probably still be blaming Bush.
[...] slay the monster in today’s cartoon, we need to copy the very successful Swiss Debt Brake and restrain the growth of government spending. And to make sure we abide by that cap, we’ll need some sensible entitlement [...]
[...] to slay the monster in today’s cartoon, we need to copy the very successful Swiss Debt Brake and restrain the growth of government spending. And to make sure we abide by that cap, we’ll need some sensible entitlement [...]
[...] No, I’m not talking about creating a libertarian Nirvana, with the federal government consuming only three percent of economic output. But I think we can at least hold the line and prevent government from becoming bigger than it is today. Sort of a watered-down version of Mitchell’s Golden Rule. [...]
[...] spending grows faster than the private economy (sort of Obama’s Golden Rule rather than Mitchell’s Golden Rule), bad things inevitably will [...]
[...] does create jobs? I explain we need to shrink the burden of government and I cite my favorite Golden Rule about the importance of making sure the productive sector of the economy grows faster than the [...]
[...] budget if we merely limit federal spending so that it grows 2.5 percent annually. In other words, Mitchell’s Golden Rule leads to good [...]
[...] taxes usually are a substitute for the real solution of spending restraint (i.e., Mitchell’s Golden Rule). Politicians oftentimes refuse to reduce the burden of government spending because of an [...]
[...] even if these nations merely abide by Mitchell’s Golden Rule and restrain spending so that it grows slower than the private sector, that would be [...]
[...] even if these nations merely abide by Mitchell’s Golden Rule and restrain spending so that it grows slower than the private sector, that would be [...]
[...] The key variable is making sure spending doesn’t consume ever-larger shares of economic output. In other words, follow Mitchell’s Golden Rule. [...]
[...] should worry anybody who cares about the future of the nation, starting with an inverse version of Mitchell’s Golden Rule. Handouts have been growing twice as fast as overall personal [...]
[...] should worry anybody who cares about the future of the nation, starting with an inverse version of Mitchell’s Golden Rule. Handouts have been growing twice as fast as overall personal [...]
[...] But what they do show is that the nation’s fiscal problems easily can be addressed with some modest spending restraint. Sort of a practical application of Mitchell’s Golden Rule. [...]
[...] is clearly doing better on jobs, and it’s easy to avoid higher taxes when you obey Mitchell’s Golden Rule and restrain the burden of government [...]
[...] few comments on the debate. I channel the wisdom of Mitchell’s Golden Rule by saying the most important goal is restraining the growth of federal [...]
[...] in Slovenia where I just finished indoctrinating educating a bunch of students on the importance of Mitchell’s Golden Rule as a means of restraining the burden of government [...]
[...] is clearly doing better on jobs, and it’s easy to avoid higher taxes when you obey Mitchell’s Golden Rule and restrain the burden of government [...]
[...] the burden of government spending grows slower than the economy’s productive sector (i.e., Mitchell’s Golden Rule), then deficits and debt fall. To be blunt, if you cure the disease, the symptoms automatically [...]
[...] simple way to achieve this goal is to adhere to Mitchell’s Golden Rule and and make sure the private sector grows faster than the public [...]
[...] That’s all fine and well, but good fiscal policy is achieved by reducing the burden of government spending, and that means that restraining the budget so that federal outlays grow slower than the private sector. [...]
[...] wrote about the Ryan budget two days ago, praising it for complying with Mitchell’s Golden Rule and reforming Medicare and [...]
[...] wrote about the Ryan budget two days ago, praising it for complying with Mitchell’s Golden Rule and reforming Medicare and [...]
[...] is the chart I created a couple months ago to show that relationship. For those unfamiliar with Mitchell’s Golden Rule, “the private sector should grow faster than the government”. I still prefer the stronger form [...]
[...] But the serious point to this post is that we will face a fiscal crisis at some point if government isn’t put on a diet. [...]
[...] But the serious point to this post is that we will face a fiscal crisis at some point if government isn’t put on a diet. [...]
[...] If a nation obeys Mitchell’s Golden Rule for a long enough period of time, government spending as a share of GDP asymptotically will [...]
[...] since Mitchell’s Golden Rule is based on the very modest goal of having government grow slower than the private sector, it’s [...]
[...] The moral of the story, needless to say, is that good things happen when governments comply with Mitchell’s Golden Rule. [...]
[...] wise fiscal policy, needless to say, is to follow Mitchell’s Golden Rule. If the burden of government spending grows slower than the private economy, any nation can climb [...]
[…] words, the government growth rate has been faster than that of the private sector, going counter to Mitchell’s Golden Rule. The fundamental flaw in this model is the fatal conceit of politicians who believe that they can […]
[…] very easy for me to bluster about “all that’s required” to satisfy this Golden Rule. It’s much harder to convince politicians to be frugal. Yes, it happened during the Reagan […]
After applying Bernanke logic (the tail wagging the dog):
If we grow government business will grow even more.