The United States can continue increasing the size of the federal government, or it can improve the health of our economy – but it cannot do both.
That is because government does not create wealth. It just shuffles it around. Economic growth requires expansion of private-sector investment. But the combination of high taxes and government borrowing and spending, beyond high tax revenue, is blocking private investment and job creation. Too many companies pay so much in taxes that not much is left over to invest. And businesses that have money they could invest aren’t doing so for fear that Washington will increase taxes. The result is more unemployment.
Against that troubling backdrop, we spotted this beginning to a recent article by The Associated Press: “Construction spending edged up in June but all the strength came from the government. Private sector activity in both housing and nonresidential projects fell.”
In other words, what construction there was came largely from government spending propped up by tax dollars, not from the private sector responding to consumer demand for goods and services.
Growth of government is not a substitute for sound economic growth.