Government Dollar Spending Does Not Produce Economic Growth

Learn the difference between a dollar “invested” by government and a dollar invested by private industry.

Those who believe in state control would leave you to believe that it is the same, if not better, if government makes the decision to spend, or as the Obama administration says, “invest.” As opposed to private enterprise investments.

In one case, the allocation is made by political decision which often is subject to pressures which have nothing to do with supply and demand. Rationing and corruption follow. The other is more likely to conform to what the public wants.

Moreover, private industry investment has a multiplier factor that government spending does not.

Too many government jobs have no multiplier effect on the economy. Their purpose may be different. Often it primary has political, social and environmental intention.

Governments don’t innovate and create new companies and multiples of jobs. Nor do they enervate optimistic psychology of a booming economy. You don’t have to be a rocket scientist to appreciate this. Yet, that psychological effect is most important.

Remember: Socialist countries have never successfully been satisfactory consumer societies