5 Unacknowledged, Unexpected, and Unavoidable Facts about Govt Spending and the Economy

“Politicians are like criminals in Batman comics. They’re a superstitious, cowardly lot. And the minute that they know they’re going to lose elections because they’re spending too much money, they will find their inner cheapskate and start [spending less],” said Reason's Nick Gillespie during his speech at the Reason Weekend event in Las Vegas.

In "5 Unacknowledged, Unexpected, and Unavoidable Facts about Government Spending and the Economy," Gillespie says politicians such as President Obama and John Boehner are in denial. Influential economists like Paul Krugman and Lawrence Summers correctly diagnose debt as a problem even as they prescribe more debt as the cure.

Gillespie argues that:

  1. We’re spending too much. Two wars, entitlement growth, and a massive stimulus are the results of a spending frenzy over the last decade.
  2. We’ve got too much debt. Every level of government is in over their heads. The literal and figurative bankruptcies of cities such as Stockton, California and Harrisburg, Pennsylvania are the canaries in the coal mine.
  3. Debt overhang kills growth. The latest studies are clear: excessive debt, sustained over long periods of time, hurts economic growth. Beyond the cost of higher interest rate payments, increasingly higher debt loads – which Gillespie calls “a ziggurat of doom” – promises to reduce opportunities for everyone.
  4. Spending growth is driven by entitlements. Since the Great Society programs of the 1960s, the government has switched from providing infrastructure and basic services, to being a national insurance broker. The consequences of this are dire because, as statistician Nate Silver notes, "most of us don't much care for our insurance broker."
  5. Trust in government is at historic lows. This kind of distrust is an inevitable result of a mismanaged economy. Yet it's also cause for optimism. Public discontent sow the seeds of reform, allowing the possibility of meaningful fiscal reform.

Gillespie's talk, in which he also sketches solutions to long-term economic malaise, is followed by audience Q&A. 

Runs about 38 minutes.

Produced by Todd Krainin. Camera by Meredith Bragg and Alex Manning.

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  • fishfry||

    And yet, after all that ... Gillespie's still wearing that fuckin' jacket.

  • Best Of All Possible Tyrannies||

    Got something against leather? You would hate my favorite hat.

  • ebony||

    until I looked at the receipt of $8595, I did not believe that...my... friend woz like actualy earning money parttime on there computar.. there mums best friend haz done this for only six months and just now repaid the depts on there apartment and bourt a great new Lotus Esprit. this is where I went, kep2.com

  • GregMax||

    "Debt overhang hurts growth" . . .

    And stimulus(fed funny money)dilutes the buying power of people who are not earning more.

  • amyjorden||

    If you think Kyle`s story is cool..., in the last month my boy frends brother earned $5098 workin fourteen hours a week at home and they're neighbor's mom`s neighbour was doing this for nine months and brought home over $5098 in their spare time at their pc. use the advice available on this page...
    http://www.big76.com

  • culvery50||

    my friend's ex-wife makes $77 every hour on the laptop. She has been unemployed for 9 months but last month her paycheck was $21403 just working on the laptop for a few hours. Read more on this site http://www.wow92.com

  • JackLacton||

    I'm surprised that Nick Gillespie doesn't have:

    6-Government spending reduces innovation in an economy.

    Innovation is the lifeblood of growth and prosperity. It's an argument that we need to start making.

  • Gorilla tactics||

    And whats cool about it is that the argument doesn't necessarily have to framed in economic terms, look at neal stephenson's speeches where he talks about the shuttle launch as the "capstone" instead of the new era it was promised to be. Its non ideological and when looked at in retrospect, it's pretty obvious. Tyler Cowen does that as well

  • buybuydandavis||

    "Trust in government is at historic lows. "

    But do they trust freedom more?

  • sandrajacob2||

    like Randall answered I'm in shock that people can make $6888 in 4 weeks on the computer. did you read this site link
    http://www.big76.com

  • Avery56||

    my buddy's sister-in-law makes $62/hr on the computer. She has been unemployed for 10 months but last month her paycheck was $20013 just working on the computer for a few hours. Go to this web site and read more http://www.wow92.com

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