Ask yourself this: is it better to be poor in a rich country or poor in a poor country. The answer, I think, should be clear. If you take the time to understand why it’s better to be poor in a rich country, you will recognize that it has profound implications.
Policies that depress economic growth now (high taxes, high regulation) may or may not help people today but they definitely steal huge sums of money from them later. I don’t just mean today’s workers’ grandchildren will have less money - I mean today’s workers have less money later in life. It happens that quickly.
Keeping in mind that it’s better to be poor in a rich country, consider this:
Current Per Capita GDP:
- US $47,000
- France $33,000
- U.K. $35,000
- Germany $36,000
As recently as the 1970s, the U.S. and Europe had similar sized economies. But Europe went welfare state whereas we freed up our economy. The result was that Europe slowly fell behind us slowly but steadily, as year after year of lower growth had its effect. The result is that Europe now is significantly poorer than it would have been - in the lifetime of the workers under whom the policies began.
Think about that the next time Obama tries to sell you more government spending.