Thursday, August 5

Government spending is restraining growth

John A. Allison of the Cato Institute: “If you look at economic growth, the real issue is the distribution of revenue between governments and the private sector. Private sector produces more jobs and more well-being. … We really need to reduce spending first, because that’s our problem: Spending is at such a high level relative to the total revenue of the U.S. that it’s keeping us from growing.”

During the 1980s and 1990s the federal government spent around 19 percent of GNP. Now the federal government spends at the rate of 25 percent of GNP. Add in state and local governments, and we’re at 36 percent.