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September 21 2009

The Empirical Evidence Against Big Government

Nicole Kurokawa Neily

According to the Cato Institute's Dan Mitchell, when politicians want to spend money, they claim that new and bigger programs are "an investment to economic growth." In his new video, "The Empirical Evidence Against Big Government," Mitchell seeks to dispel this myth by examining the relationship between economic growth and the size of government. Take a 6 minute break and watch:

As Mitchell points out, the challenging issue is determining the point where government gets too big. Using the "Rahn curve," named for economist Richard Rahn, he asserts:

There is very little growth when there is no government (because it's hard for people to be productive in a state of anarchy). As governments provide core public goods such as rule of law and protection of property rights, there is a positive relationship between government spending and growth.  But then, as politicians begin to spend money on transfer programs, and subsidies, and pork barrel spending, this relationship turns negative - and larger levels of government mean lower amounts of growth.

Without a doubt, federal spending needs to be reined in - groups throughout Washington, such as Citizens Against Government Waste and the Sunshine Review's Show Me the Spending coalition have done a great job at highlighting out-of-control pork barrel spending, and I urge you to look at their sites, or others, like WashingtonWatch.com, to see what earmarks legislators have been adding to bills - for  example, $2 million for Centennial Trail Expansion in Snohomish County, WA, courtesy of Sen. Patty Murray; $3.4 million for the Virginia Aquarium & Marine Science Center Pedestrian Bridge, courtesy of Rep. Glenn Nye; $1 million for a community dance program, courtesy of Del. Eleanor Holmes-Norton... really???)

Should the federal government collect tax dollars to be redistributed to pet projects as Congress sees fit (after an appropriate amount has been skimmed off the top for administrative costs, of course)? Or should the government be collecting less and leave such decisions up to local communities?

In the words of G.I. Joe, "now you know, and knowing is half the battle." Citizens must hold their elected officials accountable for their profligate ways and demand fiscal responsibility.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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