by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
There are several known tenets of N&O-nomics, such as:
Basically, in N&O-nomics, anything that raises prices and costs on people makes them have to spend more, and more spending means more economic growth. This dynamic is especially true when it involves people having to spend more on government, because government creates government jobs, which means more jobs, which is proof of more economic growth. Tradeoffs and opportunity costs are necessarily defined away in this framework — except with respect to government spending.
This weekend’s editorial by Ned Barnett offered an excellent example of this economic theory. A decline in federal spending coinciding with the end of the “stimulus” program (a.k.a., the colossal failure) is said to have “created a serious drag on the economy and hobbled a recovery.” In North Carolina, the home of “one of the nation’s largest improvements in labor-market performance and overall economic growth” since mid-2013, “excessive tax cuts” and “cutting government spending” in order to “spur the economy” is called “painfully wrong.”
The theory illustrated
Above is an illustration of N&O-nomics at work, with businesses, employees, and the poor plugged into the public sector for the spending power that creates economic growth, along with the theory’s only conceivable way that the public sector generates its spending power:
As you can see, it is an elegant system featuring a very simple design. It’s so easy to understand and opine from, one doesn’t even need to bother with all those hundreds upon hundreds of peer-reviewed academic studies over the past quarter century providing strong empirical support that “lower levels of taxes and spending, less-intrusive regulation, and lower energy prices correlate with stronger economic performance.”