Keynesian Economics and the Fallacy of Boosting Growth by Destroying Wealth | International Liberty

Yet Keynesian economics has “perplexing durability,” probably because the theory tells politicians that their vice of profligacy is actually a virtue.

Jeff Jacoby explains why this is poisonous economic analysis.

Could anything be more absurd? The shattering losses caused by hurricanes, earthquakes, forest fires, and other calamities are grievous misfortunes that obviously leave society poorer. Vast sums of money may be spent afterward to repair and rebuild, but society will still be poorer from the damage caused by the storm or other disaster. Every dollar spent on cleanup and reconstruction is a dollar that could have been spent to enlarge the nation’s reservoir of material assets. Instead, it has to be spent replacing what was lost. …No, hurricanes are not good for the economy. Neither are floods, earthquakes, or massacres. When windows are shattered, all of humanity is left materially worse off. There is no financial “glint of silver lining.” To claim otherwise is delusional.

Source: Keynesian Economics and the Fallacy of Boosting Growth by Destroying Wealth | International Liberty

Will Trumponomics Mean More Freedom and Prosperity? | International Liberty

danmitchel

Dan Mitchell

I was sitting directly under a television in a Caribbean airport yesterday when Trump got inaugurated, so I inadvertently heard his speech.

The bad news is that Trump didn’t say much about liberty or the Constitution. And, unlike Reagan, he certainly didn’t have much to say about shrinking the size and scope of Washington.

On the other hand, he excoriated Washington insiders for lining their pockets at the expense of the overall nation. And if he’s serious about curtailing sleaze in DC, the only solution is smaller government.

But is that what Trump really believes? Does he intend to move policy in the right direction?

Well, as I’ve already confessed, I don’t know what to expect. The biggest wild card, at least for fiscal policy, is whether he’ll be serious about the problem of government spending. Especially entitlements.

Source: Will Trumponomics Mean More Freedom and Prosperity? | International Liberty

Venezuela and Santa Claus vs Thomas Sowell and the Little Red Hen | International Liberty

In the short run, though, the Venezuelan government gets to play Santa Claus. At least for 2016.

But it won’t have that option in 2017. And because the nation’s kleptocratic government is running out of victims, it’s just a matter of time before the system collapses, at which point the government either gives up power or launches a brutal crackdown.

Hopefully the former.

Though it would remain to be seen whether the leftist thugs who currently hold power are able to escape the country with all the loot they’ve stolen, or whether they get the Ceausescu treatment.

They deserve the latter.

Earlier this year, I borrowed from Dante’s Inferno and created the Five Circles of Statist Hell. At the time, I suggested that Venezuela was on the cusp of moving from the third circle (̶…

Source: Venezuela and Santa Claus vs Thomas Sowell and the Little Red Hen | International Liberty

Comparing the cost of living between 1975 and 2015: You are being lied and fooled when it comes to inflation data and the cost of living.

Inflation is widely misunderstood by the public. Even economists tend to have a hard time coming to a general agreement to the true definition of inflation.  When you ask the person on the street what inflation is they usually respond by saying the “price of things going up” which is more of a

Source: Comparing the cost of living between 1975 and 2015: You are being lied and fooled when it comes to inflation data and the cost of living.

Comparing the cost of living between 1975 and 2015: You are being lied and fooled when it comes to inflation data and the cost of living.

The Myth and Reality of Trickle-Down Economics | International Liberty

…allowing everyone to pursue all the opportunities they can in the marketplace, with the minimal level of taxation and regulation, will create generalized prosperity. The value of cutting taxes is not just cutting them for higher income groups, but for everyone. Letting everyone keep more of the value they create through exchange means that everyone has more incentive to create such value in the first place, whether it’s through the ownership of capital or finding new uses for one’s labor.

Now that we’ve dispensed with the silly left-wing caricature of trickle-down economics, let’s discuss how there actually is a sensible way to think about the issue.

Source: The Myth and Reality of Trickle-Down Economics | International Liberty

Hillary Clinton, Willie Sutton, and Class-Warfare Tax Policy | International Liberty

I don’t want to imply that there’s some moral equivalence between Hillary Clinton and Willie Sutton. Perish the thought!

After all, I’m sure Willie Sutton never expected gratitude from his victims.

If I had to summarize my views on fiscal policy in just two sentences, here’s what I would say.

  1. Government spending undermines growth by diverting labor and capital from more productive uses to less productive uses.
  2. Tax rates on productive economic behaviors such as work, saving, investment, and entrepreneurship should be as low as possible.

Since innovation, risk-taking, investment, entrepreneurship, and hard work are the keys to long-run growth, it certainly seems that the tax code shouldn’t be punishing those things.

She (Hillary) wants voters to adopt and us-vs-them mentality, so she demonizes successful people and implies that their wealth is somehow illegitimate.
In part, she is perpetuating the traditional leftist myth that the economy is a fixed pie and that the rest of us have less because someone like Bill Gates has more.

Source: Hillary Clinton, Willie Sutton, and Class-Warfare Tax Policy | International Liberty

The Recipe for Job Creation: Less “Help” from Washington | International Liberty

The entire video was very concise, lasting less than four minutes, so it only scratched the surface. For those seeking more information on the topic, I would add the following points.

  1. Businesses will never create jobs unless they expect that new employees will generate enough revenue to cover not only their wages, but also the cost of taxes, regulations, and mandates. This is why policies that sometimes sound nice (higher minimum wages, health insurance mandates, etc) actually are very harmful.
  2. Redistribution programs make leisure more attractive than labor. This is not only bad for the overall economy because of lower labor force participation. This is why policies that sometime sound nice (unemployment benefits,food stamps, health subsidies, etc) actually are very harmful.

The American economy is in the doldrums. And has been for most this century thanks to bad policy under both Obama and Bush. So what’s needed to boost growth and create jobs? A new video from …

Source: The Recipe for Job Creation: Less “Help” from Washington | International Liberty