Thursday, October 11, 2012

If Conservative Economic Dogma Were Correct Greece Would be Prosperting and Germany Would Be . . .


Faith based economics is a wonderful thing.  People who believe in economic doctrine based solely on what they assert to be true as a given do not have to bother with facts, data or experience.  Economics for them is what they say it is, no more no less.

The core of faith based economics is that taxes are bad, government spending is bad, and taxes and government spending together are really bad.  There are of course deviations to the theory.  For example government spending on defense is good.  This is how Mitt Romney can claim that cutting defense spending will destroy jobs, and that cutting non-defense spending will crease job.  No there is no logical consistency, that is why it is faith based, not reality based.

So if one were to look at Europe, for example one would expect to see high tax countries floundering and low tax countries succeeding.  So lets look at the data.

Yes you are reading that correctly.  At the bottom of the list is economic basket cases like Ireland, Spain and Greece.  And Germany, the economic powerhouse of Europe is pretty high.  Yes, too high a public sector is also a problem, see the France and Italy in the table.  But Germany at almost 40% is about as clear a piece of proof as needed that high government spending can boost an economy, if it is spent in the right way.   But don’t tell Conservatives, it would ruin their day.

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