Economy Growing Slowly Due to Antigrowth Policies
February 20, 2014
Antigrowth policies, not a reduction in government spending, are to blame for our country's anemic growth, say Curtis Dubay, a senior policy analyst, and Stephen Moore, the chief economist, at the Heritage Foundation.
The U.S. Bureau of Economic Analysis (BEA) recently issued a report on the country's economic growth. While the second half of 2013 saw 3.5 percent growth, the year as a whole only grew at 1.9 percent. This is an incredibly slow rate of expansion (the United States saw 4 percent growth after World War II, for example).
- This slow recovery has cost the United States $1.3 trillion in gross domestic product (GDP) compared to past economic recoveries, according to a study from the Joint Economic Committee. Had the United States even had an average recovery, it could have generated $1.3 trillion more since the recession.
- The country's poor growth is not the only indicator of a weak economy. The stock market is suffering and car sales were down last month. The manufacturing outlook also grew bleaker between December and January.
Some have tried to pin the blame for slow growth on decreases in government spending, which could not be more wrong.
- Government spending has fallen over the last six months, leaving the private economy to grow. When government does not spend, it leaves resources to the private sector rather than taking them in the form of taxes or borrowing.
- The private sector then takes those funds and spends them now or spends them later. Either way, a reduction in government spending does not cause the economy to suffer.
What is actually to blame for our slow growth? Washington policies that hinder healthy economic growth and expand the size -- and role -- of the federal government. Such policy abuses include the $1 trillion stimulus in 2009, ObamaCare, $6 trillion in additional national debt, an increase in regulations -- including those that have prevented the country from capitalizing further on its energy boom -- the Federal Reserve's quantitative easing program and tax increases.
Source: Curtis S. Dubay and Stephen Moore, "Economy Better, but Still Growing Too Slowly Because of Anti-Growth Policy," Heritage Foundation, February 6, 2014.
Browse more articles on Economic Issues