If We Only Spent All the Money, Then Everyone Would Be Prosperous!


Every day is Christmas for the Naples Fire Department. ||| Naples News
Naples News

On the front of today's New York Times business section is a remarkable—or should I say remarkably unremarkable—news article whose entire premise, unchallenged in the course of 1,341 words and input from 10 sources, is that more government spending is a very good thing because it leads to more government jobs and therefore helps the economy. Hooray!

If you think I am being unfair in this characterization, consider the headline: "Government Spending, Edging Up, Is a Stimulus." Or the headline on the jump page inside: "Rebound in Government Spending Starts to Aid Economy After Years of Cuts." Or the headline on the associated chart: "A Small But Important Lift." Or the blurb: "The public sector is once again adding to prosperity." Before consuming some counter-factual questions, enjoy the celebratory sounds of friction-free assumptions and loosening belts:

NAPLES, Fla. — For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth. Now, finally, relief is in sight. For the first time since 2011, local, state and federal governments are providing a small but significant increase to prosperity. […]

And so on a recent windswept afternoon, John Lynch, armed with a police radio and a giant net, stood along a fishing pier in Naples, on guard for pelicans that might become entangled in fishing lines.

"That's my job, to try and get them to safety," said Mr. Lynch, a retired banker with a snowy beard whose uniform was a fisherman's cap and shorts. Mr. Lynch is one of the latest additions to the city's payroll. His is the kind of government job this Gulf Coast town never would have even contemplated during the recession. […]

"This new revenue, the increase in the economy, the increase in G.D.P. —everything is looking good," [said Ron Haskins, a senior fellow at the Brookings Institution]. "It's releasing pressure to be fiscally restrained." […]

The Naples Pier outreach assistant job was a minor item in the $32.9 million budget, but an important symbol that times were flush again. […]

The Naples Fire­Rescue Department just bought two new emergency vehicles worth $196,000 each. One of the boxy red trucks arrived last month, just in time to be steered gingerly down the route of the city's annual Christmas parade, where palm trees were adorned in white holiday lights and children darted for candy tossed from holiday­themed floats.

It is an event so precious to locals that the city kept it going during the downturn, said John F. Sorey III, mayor of Naples.

"We've got to preserve the wow factor," he said, "or all our tourists could go somewhere else."

Credit where it's due: As government-spending euphemisms go, preserving the wow factor is surely in the Top 20…

I have only four questions for the NYT and those who agree with its premise that the more government spends, the more prosperous we are:

1) Why were states not measurably more prosperous after increasing government spending by more than 80 percent in real terms between 2003 and 2007?

2) Between the time of Bill Clinton's last submitted budget of $1.8 trillion, and Barack Obama's first submitted budget of $3.6 trillion, did the average American become more or less prosperous?

3) The United States after World War II, Canada in the 1990s, and Australia in the 1980s all became significantly more prosperous—despite ample warnings to the contrary—after cutting, not increasing, government spending. Wha' happen?

4) Is there a ceiling on what percentage of GDP the government should account for, and if so why should there be one, and where should it be?