Wednesday, August 27, 2014

Size of government matters to economic growth

I have to say that in the US, no matter who is the president of the United States, to reform congress and the lobbyists and the lobbyists and the curropt system and the cronies is incredibly difficult. So you have essentially governments around the world and bureucrasies that are very difficult to reform. And I have to point out that the period between 1970 - 1910 in Europe and US was characterized by very strong growth certainly in real income terms and that was the period the government made up for maximum 15 % of the economy. So the larger the government becomes the lesser economic growth there is. 

If someone asked me how do you really stimulate growth in the global economy, I would say that Government spending has to be cut meaningfully and the economy has to be free from the chain of that he buerecracy the government imposes on them.