Saturday, April 14, 2012

How to Create Economic Growth

The economy of any nation is cyclic - ups and downs happen over and over again. History shows us that if we simply wait it out, the downs will eventually pass, and we will return to the ups. But sometimes people grow impatient - understandably, given the human cost of the downs - and want the government to "do something" to "fix it." But well-intentioned attempts to intervene in the economy can only make things worse, never better. Senator Barry Goldwater wrote:

Let us, by all means, remember the nation's interest in reducing taxes and spending. The need for "economic growth" that we hear so much about these days will be achieved, not by the government harnessing the nation's economic forces, but by emancipating them. By reducing taxes and spending we will not only return to the individual the means with which he can assert his freedom and dignity, but also guarantee to the nation the economic strength that will always be its ultimate defense against foreign foes.

Whenever we hear the calls for "more jobs" or "job creation" or "better jobs" - whether in the 1960's (when Goldwater wrote) or in the present - the answer is always to reduce regulation, reduce taxation, and let creative people explore new ideas in industry and business. Steve Jobs was allowed to create the iPod, iPhone, and iPad because of this economic freedom. Future creative geniuses will be able to continue such artistry only if government gets out of the way and lets them work.