Mr. Obama believes that ever higher taxes on productive individuals and then spending that money to make sure all other individuals have the same opportunities for the good life. But as the productive find they are no longer able to pay the increased taxes required by the all consuming general public, the ranks of those receiving the unearned rewards grows faster then those that are footing the bills.
As anyone that was paying attention, the last time the 'shovel ready' stik was used to spend hundreds of billions of dollars saw a total waste of money as even Mr. Obama said, he joked about this, there wasn't as many shovel ready jobs as he thought. The entire jobs council found this funny as well. Who knew?
Results, $852 billion of taxpayers money, borrowed money, was completely wasted, much of it was lost to fraud and outright theft through self serving legislation. All it really accomplished was to shore up the progressive voter base by supporting big labor unions at the state and federal level that saw their pensions in dangers. General Motors, Chrysler (UAW) and others that contribute hundreds of millions of dollars to progressive Democrat campaigns. This, in reality, is called money laundering of tax dollars.
I know, "what difference does it make anyway", what's important it feels right that Mr Obama should raise more taxes to broaden his voter base. No? hmmmmm I wonder why the majority voted last November to continue this spending of money we don't have, and a ready and willing acceptance of a decline in their life style. Why would they knowing do this? I guess maybe they just have no clue what's going on right before they eyes. or just don't care. As long as they have their IPhone, life is good.
Public Expenditure Fails to Improve Labor Productivity
February 20, 2013
Source: Melissa Yeoh and Dean Stansel, "Is Public Expenditure Productive? Evidence from the Manufacturing Sector in U.S. Cities, 1880-1920," Cato Journal, Winter 2013
The federal government and local municipalities often claim that public sector spending increases labor productivity. However, there is no relationship between public expenditure and labor market productivity, say Melissa Yeoh, an assistant professor of economics at Berry College, and Dean Stansel, an associate professor of economics at Florida Gulf Coast University.
- Yeoh and Stansel use three econometric models to determine if there is a relationship between public expenditures and labor market productivity in the manufacturing sector.
- While other studies have examined states or nations, this is the first study to examine municipal spending.
- It uses a data set that includes information on 45 of the largest cities in the United States between 1880 and 1920.
- According to their multivariate regression, the authors report that they did not find a positive relationship between public expenditure and productivity.
- Despite analyzing a period of rapid expansion in both public expenditure and productivity, Yeoh and Stansel's results show that higher levels of productive public expenditure by city governments have no statistically significant impact on labor productivity in the manufacturing sector.
- For every public dollar spent, labor productivity did not rise by a certain amount.
- Between 2007 and 2012, U.S. federal spending grew by more than $1 trillion as an attempt to improve economic conditions.
- Yeoh and Stansel's results suggest that spending on infrastructure projects at the state and local level, along with other public expenditures, fail to produce the desired benefits.
- The authors say an effective strategy for municipalities to revive their local economy would be to keep tax burdens low.
1 comment:
The historical record is clear, there is an inverse relationship between public spending and private sector growth. There are some charts at Sydenham's Law of public expenditure and economic growth. The real history trumps any theories and models.
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