Does Government Spending Create Economic Growth?

If you knew a dollar invested in something would wind up losing more than a dollar, would you consider that a good investment?

The government does just that when it starts spending taxpayer and borrowed money. Watch as Professor Antony Davies of Duquesne University explains the unseen costs of government spending and the best way to stimulate the economy: the private sector.

"In the best case scenario what we see is still no relationship between government spending and economic growth. In the worst-case scenario, we actually see a negative relationship. That is, as the government spends more money, the economy actually contracts." --Antony Davies

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[ItalianAvalanche]

Genius. I love these videos. So informative, so to-the-point.

[EconFree]

Thanks!

[jimmmmie]

Great vid!

I would only add that when govt takes money from one & gives money to another, it's not giving 100% of what it took. It's keeping a chunk to pay for govt.

So money that would be used for producing goods that might be sold to other nations, thereby making the US wealthier, is instead paying someone to push pencils or poke at calculators or lobby Congress. Activities that produce nothing.

[FurryMurry7]

Indeed. The government DOES provide roads that connect the consumer to the business. But what if the government DIDN'T? Would the businesses start building private roads (with their own lighting?)

Remember that businesses are motivated by profit. If a business thinks that it can PROFIT from building its own road, it will definitely attempt a road. I believe that we would be lying to ourselves by saying "if the government doesn't do it, it won't get done" as that's usually not the case.

[FurryMurry7]

OMG!! I would PAY to watch that debate!!! :D

[maggot1111666]

This guy needs to debate Sam Seder

[luishomeroremohsiul]

i just want to understand this a little more.. all of this sounds fantastic, but what about all the means that connect the consumer and the business? i'm talking about roads, public lighting, sewage, etc.. things which, for the most part, the government "provides" by taxing...

[TheBlackLotusKing]

CLASSICAL ECONOMISTS ARE THE ONLY ECONOMISTS!

[blahblop123]

you can either get fed bullshit by Bill O'Reilly ORRRRR.. MAYBEE, you can get fed reliable knowledge from a well educated professor who's sole field of study is economics.

[Lewis Bosworth]

Well put. And that's because there's no signal from the market that would lead to logical allocation. I was talking with a few people from the Czech Republic a few years back and they were expressing how their government ran ads for pink and green blankets that were produced but not demanded. They couldn't get rid of the surplus. A free market wouldn't have produced as much waste, even if overruns are always a possibility.

[laurasIs2c]

The missing information is, Increasing the salaries and the pensions of law makers, corporations with protections of our laws while giving their production to slave labor forces of governments that are far less that Government for and by the people.

Another missing bit of information about subsidies to real large corporations rather than the constant focus on individual jobs and farmers.

[FurryMurry7]

OMG!! I LOVE ANTONY DAVIES!!

[sammy potter]

Originating an argument is not an argument for truth. In this context it doesn't matter who came up with the original idea, or how they intended it.