Friday, July 11, 2014

Government spending 20% of GDP

If you want to improve your standard of living, you're not going to do it by receiving a check from the government.  The only way to improve your standard of living is by investing yourself in the marketplace.

Yet there are a lot of folks who think the government is needed to make life better for people.  They think that it's a good thing that 20% of the gross domestic product (GDP) is government.  In fact, the media is reporting this as a good thing.  They are reporting that if it weren't for Obamacare, that the economy would have had negative growth in the first quarter of 2014.

They say healthcare spending increased at its fastest pace in more than three decades because of Obamacare, according to Reuters.  They say it caused a floor that prevented a net loss in economic activity.  They say this is good.

Reuters notes:
Healthcare spending increased at a 9.9 percent annual rate, the quickest since the third quarter of 1980, and it contributed 1.1 percentage points to GDP growth.
But this is not good news.  In fact, it is bad news.  When the only reason the government grew at all (an abysmal 1% of 1% in the first quarter of 2014) is due to government spending, then you have a serious problem.  This is because, for there to be an economic recovery, it needs to come from the private sector.

It's the private sector where the good jobs come from.  It's the private sector that provides the best opportunities to get rich.  It's the private sector that provides the best opportunity to improve your lot in life, not the government.

Surely the government can create jobs.  But it does so at the expense of the private sector.  Surely the government can assure that everyone has healthcare.  Sure the government can assure everyone has a retirement.  But, it does so at the expense of the private sector.

Why? Because everything the government does is with money it took from people who work for a living.  When you take what people earn, that's money they won't be spending on goods and services; that's jobs that won't be created. All this growing government is spending money that is not yours.

But when 51 percent of people who vote don't pay taxes, they have no invested interest in this.  They don't care how much the people who work are taxed, because they're not affected by it.

It doesn't help when the media buys into the idea that more government is a good thing, and they put a positive spin on it.  They sell the idea that Obamacare prevented a negative GDP for the first quarter of 2014 and sell it as a net positive.

No wonder the youth in this nation, the millennials who have never seen a robust economy, have a pessimistic view of their country.