Wednesday, February 20, 2013
Sequestration is Good for Economic Renewal
This may sound a little cold but sequestration is not a bad thing if it focuses attention on the problem of government growth and over-reach. Given that the economy has not grown very much over the last decade, the acceleration in government size effectively crowds out private enterprise. For example, the very idea of government 'supporting' entrepreneurship makes no sense. In the classic definition, entrepreneurship is opportunity identification and risk taking. Government 'support' distorts the supply and demand relationship and thus obscures those opportunities that represent real demand for goods and services. This, in turn, distorts the risk/return calculus, so that bad ideas are kept alive while good ideas are starved for capital. Sequestration is a good thing if the net effect is to pry the sclerotic hands of government off from private initiative, innovation, and economic renewal.
at 10:05 AM