Thursday, November 11, 2010

Public Spending Increases Wealth and Prosperity

Cartoon by HalcyonSnow
Contrary to the "common sense" arguments of tea-baggers, CEOs, and rich people, in general, cutting taxes and public spending does not increase investment, productivity or wealth. Thanks to the Shanker Blog (see GDP: Government, Democracy, Prosperity), for discovering this interesting research: Why We Need Public Spending, by David Hall, Greenwich University. Over the past 200 years, public spending has steadily increased in all wealthy countries and has coincided with increased prosperity.

Of course, the rich do not want a complete end to public spending. They rely on a constant transfer of wealth from the lower classes up to them through subsidies, tax breaks and government purchases of their goods (e.g., missiles, handcuffs, tasers, etc.) The only way for them to really score off education is for continued government involvement (they want it to be mandatory and tax-funded so they have a constant revenue stream and consumer base). What they really want is an end to low interest government loans and grants to regular people (e.g, unemployment insurance, social security, medicaid) so they can profit from these services.

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