In a new mini-documentary released by the Center for Freedom and Prosperity, I explain several of the ways that government spending hinders economic growth.
Feb 23, 2021 addendum: This screenshot from the video summarizes the various ways government spending can undermine prosperity.
Costs #1 and #2 apply to every penny in the budget, as explained in the video.
[…] other words, we’re looking at trillions of dollars of additional money being diverted from the productive sector of the economy and being put under the control of politicians and […]
[…] other words, we’re looking at trillions of dollars of additional money being diverted from the productive sector of the economy and being put under the control of politicians and […]
[…] news, but the worst forms of government spending are those that actually leverage bad things. In a previous video on the economics of government spending, I call this the “negative multiplier” effect, and one of the worst examples is the […]
[…] good news is that there will be a record reduction next year in the burden of government spending. Unfortunately, the bad news is that this reduction will only occur because of gigantic spending […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth by undermining incentives for productive behavior and misallocating labor and capital. […]
[…] the World, so many factors doubtlessly contributed to the nation’s superior performance. Both theory and evidence, however, suggest that fiscal discipline is good for […]
[…] that red ink isn’t good news, but I’m much more concerned (and genuinely so) about this line from CBO’s forecast. In just 10 years, the burden of federal spending is […]
[…] narrated a video on why big government is theoretically bad for an economy, another video looking at the empirical evidence on government spending and economic […]
[…] narrated a video on why big government is theoretically bad for an economy, another video looking at the empirical evidence on government spending and economic […]
[…] also unimpressed by his desire for government to have more cash to meet challenges since it’s far more likely that government is the cause of problems rather than the […]
[…] also unimpressed by his desire for government to have more cash to meet challenges since it’s far more likely that government is the cause of problems rather than the […]
I totally agree except for one thing. The Health Care System. Now, I understand the costs involved however the alternative is terrible. So reduce entitlements or whatever but Health Care is important. Here is the issue and it’s known but maybe I can show it in a different light. First lets just get it out there.
I understand people’s issues. High government spending and possibly people will take advantage of it and maybe cause people to act less healthy. A long time ago I moved to Israel and they have a sort of hybrid system. There are 5 providers who serve as a middle man between the government and the patient. They also allow you to purchase supplemental insurance since many things the government doesn’t pay for. This means that competition is still in play to some degree. Also the prices of many services are controlled. Yes I understand that controlling prices stifles entrepreneurship but I do believe it’s does within reason. That’s debatable. The end result though is that everyone gets affordable health care. This means more potential people in the workforce as well so it’s a cost with benefits. There is also private care meaning that you can pay more to get faster service and any medicine or doctors who refused to allow their prices to be controlled.
Anyways, as a child I was diagnosed with a irregular EEG meaning that I could have potentially had a seizure although I never had one. The cost to deal with this (neurologists and medications) was covered by my parents insurance but when I moved out I had no choice but to stop the care. The cost to have it insured would mean a very high cost since it’s a pre-existing condition. To pay for the care privately would be unrealistic. So I went uninsured with no care. I put myself and others at risk due to this issue. I have a driver’s license so I could have had a seizure while driving but thank G-D I never had one. There are many people in similar situations and most are not due to the fault of the ones with the problems. What you are doing is punishing the sick people out there who could potentially be contributing members of society.
[…] amount to a couple of hundred billions dollars per year. But from an economic perspective (i.e., grossly inefficient misallocation of resources), then entire federal departments such as HUD, Education, Transportation, Agriculture, etc, should […]
[…] my primary objection to excessive government is – or at least should be – based on foregone growth. After all, government spending (whether it is financed by taxes or borrowing) diverts resources […]
Some things here to far to the right you need safety nets in a society if people aren’t working can’t get jobs why should they be punished because some thinks it’s a bad idea and it sounds good to some who don’t know the consequences of these actions !!.. This video is also trying to convince that all private enterprise is works well so all government is bad BS !!,, cheers!!.,
[…] stated, budgetary outlays divert resources from more productive uses. And this results in labor and capital being misallocated, leading to less economic […]
[…] isn’t a trick question. Even though I’ve presented both theoretical and empirical arguments against government spending, that doesn’t mean every government program […]
[…] isn’t a trick question. Even though I’ve presented both theoretical and empirical arguments against government spending, that doesn’t mean every government program […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth byundermining incentives for productive behavior and misallocating labor and capital. […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth by undermining incentives for productive behavior and misallocating labor and capital. […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth by undermining incentives for productive behavior and misallocating labor and capital. […]
[…] isn’t a trick question. Even though I’ve presented both theoretical and empirical arguments against government spending, that doesn’t mean every government program […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] and effective argument in the video, at least from my perspective, is that it shows clearly that a larger government necessarily comes at the expense of the productive sector of the economy. Pay extra-close attention around the 2:00 […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] and effective argument in the video, at least from my perspective, is that it shows clearly that a larger government necessarily comes at the expense of the productive sector of the economy. Pay extra-close attention around the 2:00 […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] or printing money – and all these options are bad for economic performance. Here’s a video that gives the theoretical explanation of why govenrment spending harms economic performance, and here’s a follow-up video providing empirical evidence about the damaging impact of too […]
International Liberty 
[…] Part II, which discusses the theoretical reasons why big government reduces […]
[…] Part II, which discusses the theoretical reasons why big government reduces […]
[…] Part II, which discusses the theoretical reasons why big government reduces […]
[…] Part II, which discusses the theoretical reasons why big government reduces […]
[…] Part II, which discusses the theoretical reasons why big government reduces […]
[…] Part II, which discusses the theoretical reasons why big government reduces […]
[…] that we should be surprised. Both theory and evidence tell us that bigger government is bad for […]
[…] that we should be surprised. Both theory and evidence tell us that bigger government is bad for […]
[…] other words, we’re looking at trillions of dollars of additional money being diverted from the productive sector of the economy and being put under the control of politicians and […]
[…] other words, we’re looking at trillions of dollars of additional money being diverted from the productive sector of the economy and being put under the control of politicians and […]
[…] background, here’s a video on the theoretical reasons why government spending hinders […]
[…] background, here’s a video on the theoretical reasons why government spending hinders […]
[…] money to be diverted from the economy’s productive sector, not all government spending is created equal when considering the impact on […]
[…] money to be diverted from the economy’s productive sector, not all government spending is created equal when considering the impact on […]
[…] money to be diverted from the economy’s productive sector, not all government spending is created equal when considering the impact on […]
[…] That’s bad for growth since resources are diverted from the productive sector of the economy. […]
[…] news, but the worst forms of government spending are those that actually leverage bad things. In a previous video on the economics of government spending, I call this the “negative multiplier” effect, and one of the worst examples is the […]
[…] good news is that there will be a record reduction next year in the burden of government spending. Unfortunately, the bad news is that this reduction will only occur because of gigantic spending […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth by undermining incentives for productive behavior and misallocating labor and capital. […]
[…] the World, so many factors doubtlessly contributed to the nation’s superior performance. Both theory and evidence, however, suggest that fiscal discipline is good for […]
[…] Instead, I want to share some of his charts on the broader topic of government spending and economic growth. […]
[…] that red ink isn’t good news, but I’m much more concerned (and genuinely so) about this line from CBO’s forecast. In just 10 years, the burden of federal spending is […]
[…] the bottom line is that most types of government spending are bad for an economy, regardless of whether they are financed by taxes or […]
[…] narrated a video on why big government is theoretically bad for an economy, another video looking at the empirical evidence on government spending and economic […]
[…] narrated a video on why big government is theoretically bad for an economy, another video looking at the empirical evidence on government spending and economic […]
[…] bad for growth since resources are diverted from the productive sector of the […]
[…] also unimpressed by his desire for government to have more cash to meet challenges since it’s far more likely that government is the cause of problems rather than the […]
[…] also unimpressed by his desire for government to have more cash to meet challenges since it’s far more likely that government is the cause of problems rather than the […]
I totally agree except for one thing. The Health Care System. Now, I understand the costs involved however the alternative is terrible. So reduce entitlements or whatever but Health Care is important. Here is the issue and it’s known but maybe I can show it in a different light. First lets just get it out there.
I understand people’s issues. High government spending and possibly people will take advantage of it and maybe cause people to act less healthy. A long time ago I moved to Israel and they have a sort of hybrid system. There are 5 providers who serve as a middle man between the government and the patient. They also allow you to purchase supplemental insurance since many things the government doesn’t pay for. This means that competition is still in play to some degree. Also the prices of many services are controlled. Yes I understand that controlling prices stifles entrepreneurship but I do believe it’s does within reason. That’s debatable. The end result though is that everyone gets affordable health care. This means more potential people in the workforce as well so it’s a cost with benefits. There is also private care meaning that you can pay more to get faster service and any medicine or doctors who refused to allow their prices to be controlled.
Anyways, as a child I was diagnosed with a irregular EEG meaning that I could have potentially had a seizure although I never had one. The cost to deal with this (neurologists and medications) was covered by my parents insurance but when I moved out I had no choice but to stop the care. The cost to have it insured would mean a very high cost since it’s a pre-existing condition. To pay for the care privately would be unrealistic. So I went uninsured with no care. I put myself and others at risk due to this issue. I have a driver’s license so I could have had a seizure while driving but thank G-D I never had one. There are many people in similar situations and most are not due to the fault of the ones with the problems. What you are doing is punishing the sick people out there who could potentially be contributing members of society.
[…] that the benefits are understated because government spending generates negative macroeconomic and microeconomic […]
[…] explanation for why various government activities hinder growth (I offer eight reasons in this video, by the […]
[…] explanation for why various government activities hinder growth (I offer eight reasons in this video, by the […]
[…] to subsidies and handouts as being an “investment” doesn’t make bigger government a wise use of other people’s […]
[…] amount to a couple of hundred billions dollars per year. But from an economic perspective (i.e., grossly inefficient misallocation of resources), then entire federal departments such as HUD, Education, Transportation, Agriculture, etc, should […]
[…] my primary objection to excessive government is – or at least should be – based on foregone growth. After all, government spending (whether it is financed by taxes or borrowing) diverts resources […]
[…] The second video reviews the theoretical reasons why a large public sector undermines prosperity. […]
Some things here to far to the right you need safety nets in a society if people aren’t working can’t get jobs why should they be punished because some thinks it’s a bad idea and it sounds good to some who don’t know the consequences of these actions !!.. This video is also trying to convince that all private enterprise is works well so all government is bad BS !!,, cheers!!.,
[…] stated, budgetary outlays divert resources from more productive uses. And this results in labor and capital being misallocated, leading to less economic […]
[…] isn’t a trick question. Even though I’ve presented both theoretical and empirical arguments against government spending, that doesn’t mean every government program […]
[…] isn’t a trick question. Even though I’ve presented both theoretical and empirical arguments against government spending, that doesn’t mean every government program […]
[…] The “competence” argument for small government augments the “economic” argument for small […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth byundermining incentives for productive behavior and misallocating labor and capital. […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth by undermining incentives for productive behavior and misallocating labor and capital. […]
[…] Actually, I hope he’s not thinking about us. We argue for a smaller burden of government spending, not a balanced budget. And we haven’t made any assertions about higher interest rates. We instead point out that excessive government spending undermines growth by undermining incentives for productive behavior and misallocating labor and capital. […]
[…] isn’t a trick question. Even though I’ve presented both theoretical and empirical arguments against government spending, that doesn’t mean every government program […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] and effective argument in the video, at least from my perspective, is that it shows clearly that a larger government necessarily comes at the expense of the productive sector of the economy. Pay extra-close attention around the 2:00 […]
[…] The second video reviews the theoretical reasons why a large public sector undermines prosperity. […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] and effective argument in the video, at least from my perspective, is that it shows clearly that a larger government necessarily comes at the expense of the productive sector of the economy. Pay extra-close attention around the 2:00 […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] those who want additional information on the economics of government spending, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government. And this video explains that […]
[…] or printing money – and all these options are bad for economic performance. Here’s a video that gives the theoretical explanation of why govenrment spending harms economic performance, and here’s a follow-up video providing empirical evidence about the damaging impact of too […]