Does government spending create economic growth?


Does government have the ability to create jobs?

In the following video presentation, Professor Antony Davies of Duquesne University says yes, government spending creates some jobs, but taxation destroys other jobs. “At the end of the day, the government isn’t creating jobs, it’s moving jobs.”

In his presentation, Davies presents charts comparing government spending and economic growth. The only relationship that emerges is that as government spending grows, the economy contracts. Meaning: government spending is a negative factor for economic growth.

Davies says that the fallacy of stimulus spending is that we look at only half the picture, and ignore the taxation that raises the money that is spent.

The private sector — that is, free people making decisions in their own best interest — is the best way to generate economic growth, wealth, and importantly, jobs. The best way for government to foster this process is to get out of the way, Davies says.


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