Government Spending is Bad for the Economy

Government Spending is Bad for the Economy

June 2, 2010 Posted by J. Scott Moody - 1 Comment

More evidence comes to light on a topic I’ve been discussing for awhile–more government spending is bad for the economy.  In previous studies, see here for example, I have shown that the private sector share of personal income is a good indicator of the overall economic well-being of a state.  The public sector essentially crowds-out the private sector.

Now, on a more micro level, the Wall Street Journal is reporting (gated) on a new study that shows federal earmarks “directly supplant private sector activity—they literally undertake projects the private sector was planning to do on its own.”

If you want to know more about how much “bacon” Maine’s Congressional delegation is bringing home, be sure to check out this earmark website from the Office of Management and Budget.   Just keep in mind that in real life bacon will kill you . . . the same is apparently true of federal bacon to Maine’s economy.