Wonder what you would find if you frisked the size of government?
Answer: Too little means very low economic growth, but too much means… well, the same exact thing.
Ladies and gentlemen… Welcome to Econ 101. Today, we bring you the Rahn Curve to show the declining growth of an economy when government grows too big.
There’s no wonder why President Reagan was able to turn around an awful recession so quickly based on the principle of smaller government:
The contrast with President Reagan’s antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.
In the end, larger government and high uncertainty is the enemy of investment and growth. Unfortunately, this is the type of common sense that today’s liberals and the Democratic Party continuously fail to understand. Quite honestly, it is baffling how such a large group of individuals can be so hellbent on their own ideology – that’s strictly based on theory and not reality – that they fail to look at history and the successful solutions of the past. Perhaps one day they will comeback down to Earth, but then again I might be losing touch with reality to hope for such a thing.