Here’s a story in today’s WaPo on Bill Gates’ advice to Obama: Spend More!
Bill Gates is an intelligent man. Within his own business, he knows that there are opportunity costs. He can’t order increased spending in one department of Microsoft without having to reduce it in others. Sadly, he (like most people) forgets about opportunity costs when it comes to the federal government. The nation’s resources and production are limited. Politicians can’t do anything to add to them (although they often act in ways that reduce them); all they can do is to shift them from market-determined uses to politically-determined uses. And since politics is much more prone to waste and folly, increasing the degree of politicization of the economy makes us poorer.
To borrow an old Ford slogan, disproving the idea that the government can stimulate the economy is Job 1.
