How Big Government Can Hurt Economic Growth

In my previous post we examined how Big Government can help economic growth--according to Keynesian economic theory. By the way, in order that you say this properly, it's pronounced cane-ze-an.

Now let's examine the other point of view.

The Cato Institute is a libertarian think tank. They have released a video that explains how and why excessive government spending can undermine economic growth.

Libertarians generally stand for:

• Individual liberty
• Limited government
• Free markets
• Peaceful international relations

My blogs are never about politics--but about economics. On occasion, however, discussions about economic principles will be flavored by someones political point of view--in this case libertarian. I provide this perspective so that you can compare & contrast alternative viewpoints...and draw your own conclusions.

This video discusses eight ways that Big Government can hamper economic growth.



In a 1998 study by James Gwartney, Robert Lawson and Randy Holcombe, The Size and Functions of Government and Economic Growth, they found that as the size of government (share of GDP) increases, economic growth (real GDP) suffers. We will examine their study in my next blog.