In discussions on the optimal size of government, free market vs socialism or variants thereof, some claim that Europe is doing quite well, thank you vis a vis the U.S.
Any thoughts/responses for those making such assertions?
Here's a link to someone often making them: http://seekingalpha.com/user/267315/comment/833989
JeffB:Thanks for the reply. Is the government portion of GDP 45%? Is that including state and local governments as well?
Yes, that include all levels of government. USgovernmentspending.com for more info.
JeffB:I'm sorry, but I don't quite understand what you are saying here. Is it that the bureaucracy here is a higher percentage of the population than in Europe? &/or that a smaller population is better suited to socialism or at least a "Big Government"? If so, why is that so and does the discrepancy in size translate into a very big difference in effectiveness, or ineffectiveness depending upon from which direction one looks?
Bureaucracy doesn't scale. That means that government is more effective with smaller populations, and as government expands, the efficacy of the bureaucracy declines exponentially. For example, take a look at Luxembourg in the charts here: http://workforall.net/EN_Tax_policy_for_growth_and_jobs.html. Why doesn't bureaucracy scale? Well, no organization scales. Companies don't scale too well. Otherwise, with their new economies of scale, they would just keep getting more effective. There are communication, knowledge, and logistical issues.
JeffB:Does Europe have a corporate tax? If so is it significantly smaller than our own?
It's different for each country, but the corporate taxes in Europe are like 15-25% i think. US is at 35%. And it doesn't even bring in that much revenue, so it's pretty dumb. Due to the supply-side effect, reducing corporate taxes to like 20% would bring in the same amount of revenue in several years because of increased private investment, greater incentives to produce, and companies relocating to the states. Capital always will move to locations which have economic freedom.
nirgrahamUK: JeffB:Is that slideshow online anywhere?http://picasaweb.google.com/Lilburne2i think. ...
JeffB:Is that slideshow online anywhere?
Thanks for the answers, and the link:
http://picasaweb.google.com/Lilburne2
It didn't work for me at first, but apparently it is some incompatibility with Firefox. It worked for me in IE.
I haven't found the one on "intellectual property" yet, but I started on the first one on Human Action #1. I'm hoping it will get me up to speed on Mises' "Human Action" via a virtual Cliff Notes method. I don't know if it is as thorough as Mises' work, but so far it is pretty quick and easy. Hopefully, I'll at least be able to understand the conversations and arguments on here without people talking above my head because of concepts and terminology I haven't heard before.
It looks like a nice resource.