There Is Only One Sure Way To Weather The Storm of This Recession: Shrink The Size of Government

So some conservatives are still demanding that dissenters on the question of Harper's budget draw them a road map to a healthier economic policy?

Been there. Done that.

But if they need a little more help, I'll make this as simple as possible.

Despite a relatively strong showing overall in international rankings of economic freedom, Canada is still unacceptably weak in the areas of government size and freedom to trade internationally. We need to decrease the personal and corporate tax burdens and eliminate all barriers to trade immediately, shrinking the size of government in the process. I can't make it any clearer than that.

In the words of Thucydides, author of the blog Uncommon Sense, writing in the comments section of a previous post of mine, "The ultimate goal should be to make Canada a North American tax haven and attract American investors and skilled workers who will be looking for a safe haven from the high tax, high regulatory and eventually high inflation of 'progressive' America."

The following are some clear ideas put simply, courtesy of the Center for Freedom and Prosperity.

Please take notes, Mr. Prime Minister.

Four Lessons For Growth:

(1) Protect sound money, rule of law, and property rights

(2) Don't make multiple mistakes

(3) There is no single policy for prosperity

(4) Small government is good for the economy

For more information on Canada's relative standing in the world on the issue of economic freedom, please download Chapter 3 of the Fraser Institute's Economic Freedom of the World report at the following link and skip to page 25.

"With All Due Respect, Mr. President, That Is Not True"

Earlier this month, United States President Barack Obama began peddling his transparently Keynesian 'stimulus package' to the American people. Stimulus economics, he seemed to contend, has achieved universal endorsement among experts and so it would be grossly irresponsible to fail to allow the capable hands of the government to redirect funds from private pockets to public coffers.

Barack Obama on 9 January 2009:

There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.

Unfortunately for the president, several hundred economists beg to differ.

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

Damn right.

Full page advertisement courtesy of the Cato Institute.

Reducing The Burden Of Government

The following is an excellent Center For Freedom & Prosperity video hosted by Dan Mitchell of the Cato Institute. Mitchell lucidly explains the theoretical and practical failures of the Keynesian economic model and helpfully delineates some of its greatest negative consequences in the American context, with special reference to the Great Depression and the results of the Hoover and Roosevelt administrations' commitment to statism.



As Mitchell says at the end of the video, your guess is as good as mine as to why Keynesian economics has remained so popular. What's worse, it's no longer merely the crusading socialists who embrace its assumptions and methods. Witness the massive growth in government size in recent years in the United States under an allegedly conservative administration.

Perhaps by continuing to expose the fallacies of Keynesian economics we will succeed in weaning North Americans off their diet of statism and help them develop an appetite for freedom.

H/t TSC