Thursday, July 8, 2010

Government Spending, Growth, Regulation, and Elections

Growth in Ireland following fiscal austerity measures.

Not so much growth in employment in the US following non-austerity measures. "According to, the government has now paid out $415 billion of the stimulus funds. Tax rebates account for $163 billion. Of the $252 of direct spending, the Department of Transportation has paid out $14 billion. That’s 5.5%." Iowa State University reports on how it spent its part of the money, and it doesn't look very job creating - job preserving, maybe, and let's give Obama credit, he did say create or save - but fully one third of the money was spent on retirement incentives or on jobs that are being ended.

All this leads Roberts to conclude that, whatever causes there may not be for hope, we are in for some change this election cycle. In response to the failure of the stimulus - whether because it was too small too late or was the wrong policy to begin with - he sees Obama and many Democrats moving to the center in the coming months, at least in their rhetoric, so that "It doesn’t really matter if the Republicans do particularly well or not. The legislative agenda will be moving back to the center."

Bourdreaux adds that real federal spending on regulation has consistently increased since the 1980s, and faster in every post-Reagan decade than during the 1970s. Real government regulation spending is 174% higher - nearly tripled - in 2009 than it was in 1980 during a period of deregulation that has not been as severe as some have tried to portray.

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