I heard Ed Balls on the radio this morning going on-and-on about how cutting the size of the state will harm economic growth. Wrong again! I show the proof of how wrong he is on my website: www.stuarthutton.com as part of an article setting out my own personal economic stall. Here it is:
Small State
See the graphs below. The first shows the proportion of GDP made up of PUBLIC SPENDING - That's our taxes plus borrowing spent by the government. See how the figure drops from over 45% to less than 35% between 1980 and 1990? According to the Labour Party, cutting public spending holds back growth. So - you'd expect to see the corresponding graph of GDP (Gross Domestic Product - the traditional measure of national productive output) dipping or falling, right? Now see the second graph.
See the graphs below. The first shows the proportion of GDP made up of PUBLIC SPENDING - That's our taxes plus borrowing spent by the government. See how the figure drops from over 45% to less than 35% between 1980 and 1990? According to the Labour Party, cutting public spending holds back growth. So - you'd expect to see the corresponding graph of GDP (Gross Domestic Product - the traditional measure of national productive output) dipping or falling, right? Now see the second graph.
Surprise! The growth rate actually SPEEDS UP over the same period. Why? Firstly, Private Companies tend to do things more efficiently than the state, as they have a vested interest (through competition) to innovate and improve. Secondly, when the government spends less, it taxes less, meaning that you and I have more money in our pockets to spend in the productive part of economy. Finally, when the government gets its nose out of our business, companies are more free to grow and generate employment.
Supply Side Economics
Trying to stimulate demand, through subsidy or regulation, is short term, and expensive. It is a Fool's Errand. Supply Side Economics - stimulating innovation and production - by cutting taxes, removing regulation and improving the skill-base has been shown to be a sustainable source of growth.
Trying to stimulate demand, through subsidy or regulation, is short term, and expensive. It is a Fool's Errand. Supply Side Economics - stimulating innovation and production - by cutting taxes, removing regulation and improving the skill-base has been shown to be a sustainable source of growth.
Free Markets
Functioning Free Markets are the Economic Gravity that underpins the Capitalist System. Trying to manipulate markets is like trying to fight gravity - you will always loose, and people will get hurt. Markets will always reach their equilibrium. Manipulation must be stamped out wherever it occurs - whether it be Oil Price manipulation by OPEC, Gold Price manipulation by Central Banks, Government Bond Price manipulation by Finance Minsiters (including our George), or LIBOR manipulation by banks.
Functioning Free Markets are the Economic Gravity that underpins the Capitalist System. Trying to manipulate markets is like trying to fight gravity - you will always loose, and people will get hurt. Markets will always reach their equilibrium. Manipulation must be stamped out wherever it occurs - whether it be Oil Price manipulation by OPEC, Gold Price manipulation by Central Banks, Government Bond Price manipulation by Finance Minsiters (including our George), or LIBOR manipulation by banks.
