NCPA - National Center for Policy Analysis

Effects Of Big Government On Growth

November 6, 1995

President Carter called it economic "malaise," President Clinton says we are in a "funk." But the reasons for the decline in living standards for U.S. families while they were on the watch lies not in the stars, but in their policies.

Government programs, promoted with the promise of prosperity, have not worked.

  • In the period from 1947 to 1973, real family incomes for all income groups rose during those prosperous years.
  • The malaise that Carter complained of occurred in the 1973-1982 period when families lost economic ground because incomes stagnated.
  • But during 1982-89 - the Reagan years characterized by less taxation, spending and regulations - real family income resumed its upward momentum.
  • The "funk" years started in 1989 and coincided with higher taxes, expanding regulation and increased government spending.

Under the politics of class warfare, critics say, liberals are happy even when incomes fall for most Americans - so long as they can tax the rich. But in what conservatives call their politics of envy and jealousy they hurt everyone.

The only way to turn the economy around is to follow a true growth agenda: slash spending, cut taxes, and remove regulatory burdens.

  • The unemployment rate has averaged 6.9% since the explosion in Great Society spending and taxes in the early 1970s.
  • It had averaged only 4.9% between 1947-73.
  • Real growth, which averaged 3.8% in the 1947-73 period, now averages only 2.4%.
  • The only time during which growth has approached 4% for any extended period was that same 1982-89 period when the economy was unshackled from its burdens.

Source: Senator Connie Mack (R-FL), "Out of Malaise, and into a Funk," Wall Street Journal, November 6, 1995.


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