Tuesday, August 31, 2010

The Failure of the Liberal Economic Experiment?

The Failure of the Liberal Economic Experiment?:

The liberals were quick to declare "the end of capitalism" after the '08 election. It now appears that their declaration was far premature. I like this quote ... the whole article is excellent. This quote refers to an old observation on government spending -- typically, the "seen" are some more government jobs, some public works projects, maybe even a new building or bridge; the "unseen" is effectively "the bill", the higher taxes and the misallocated resources that result in a lower standard of living for all; since the "seen" is immediate, and the "unseen" tends to be less so, often even wildly off the mark government spending can be a political asset. Apparently, thankfully, not this time!!

"Because of these policies, the “unseen” became “seen” in a fashion devastating to the politicians supporting them. Americans judged that the party in power intends the radical expansion of the size of government in perpetuity. That expansion will have to be paid for. There is no reason to expect very much good from the future if you are the sort of person who generates income and creates jobs. Your “permanent income” is going to decline, and your gut response will be to husband your resources."

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