Article first published as Two Business Myths Liberals Embrace That Hampers Economic Growth on Technorati.
Myth #2: Increased Government Involvement In The Economy Is Good
Liberals want more government involvement in the economy. They want more stimulus; more regulations; more business taxes. However, I have not seen any evidence that economic stimulus anywhere produced sustained economic benefits.
Taxing businesses means transferring from businesses to government, profits that could be available for growth, including job creation. Governments’ track records show government will waste those funds. Removing all taxes from businesses leaves funds in just the place that produces jobs. Businesses could dispose of these profits in two ways only: pay dividends to shareholders, which would be taxed, or retain profits to reinvest to generate more activities and jobs.
Businesses should not have job creation as a goal, that must be a result of growth. Government too, should not have a job-creation goal. They do not create productive jobs. Look at the huge cost for each job Obama’s stimulus created – $278,000 each. Government’s goal must be to create conditions for businesses to flourish, so they pay employees well, and reinvest funds where they have a competitive advantage – at home or elsewhere.
More government involvement in the economy will reduce economic growth. There are no examples of big governments producing sustained economic growth. What have we learned from the collapse of the former Soviet Union?
It is time we start to understand the effects of government involvement in the economy and embrace some of the tenets of the Tea Party: lower taxes, smaller government, more individual responsibility.
Given the ineptitude of the present administration, the Republicans have a great opportunity to show business’ acuity. The challenge is huge because ignorance about business prevails, and the liberal anti business media dominates.
Will popular rhetoric trump sound economic policies?
(c) 2012, Michel A Bell