Opportunity Costs

There is denial by the Democrats, of course, that ObamaCare is changing the economy. National prosperity depends upon wealth being produced. Wealth is the source for business growth, job creation and revenue for the government. When wealth declines, the growth, jobs and revenue also decline. It is elementary.

Economists and business experts stress that consumer spending is vital to the well-being of a nation’s economy. Democrats think that the way to increase consumer spending is through government stimulus programs. This Keynesian stimulus theory failed to bring the United States out of the Great Depression and is failing today to get us out of the Great Recession.

What the Democrats ignore is that the government picks and chooses where to spend the money. The money is frequently spent with political motives. This limits the impact the money could have because supporters of the party in power are the chief beneficiaries such as the unions, the green energy industry, public employees, etc.
Add to this waste of money the government entitlement programs and you have a drain on the private business sector. Small businesses and non-union people must pay higher taxes without getting anything in return. These are the very people who are the source of business expansion, job creation and revenue for the government.

Government expansion of the public sector bureaucracy means there is less money for the private sector to grow and produce wealth. It is called opportunity cost. The more money is pumped into government programs the greater the decline in consumer spending in the private sector because the government needs to tax more to maintain their bureaucracy. Government taxes cut take home pay.

The problem is that the government doesn’t produce wealth. It spends a portion of the nation’s wealth that is collected through taxes. As long as the Democrats adhere to this thinking, they will continue to cause financial problems well into the future; furthermore, they will insist that the solution to our future financial woes will be to raise higher taxes and spend more stimulus money. They ignore and deny the negative impact of their policies and legislation on the nation’s prosperity.

To paraphrase Einstein, doing the same thing over and over and expecting different results is insanity.


About camden41

Retired public school administrator Retired history professor: Taught Western Civilization, American Civil War, United States History, Economic History, Ancient & Medieval Foundations, American History Since 1945
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