Big Government vs. Small Government

In the battle between government models, small government is winning. Hotnomics is hosted by Emerald Robinson. http://www.freedomandprosperity.org Source: CFPEcon101 YouTube channel.

Transcript:

It's a battle of the governments on this episode of Hotnomics. In this corner, weighing in a 6'6” 250 pounds, the one, the only, big government. In the opposing corner, coming in at 5'2”, 125 pounds, an unlikely contender, let's give it up for small government. Sound a little mismatched? Well, it is. Odds are actually in the small guy's favor because, you see, in the battle current big government and small government models, small government is actually winning.

Fifty years ago, Singapore and Hong Kong were very poor Asian city-states without natural resources. Now their millions of citizens enjoy the highest standard and lifespans on the planet. Singapore being number three, and Hong Kong being number four, in terms of longevity. They didn't get there from a lot of government spending. In both countries government spending is well under 20 percent of GDP. They got there by economic freedom. Hong Kong being number one, and Singapore being number two, out of the 159 countries ranked. France may pride itself on Marta, the baguette, and the big government (oui oui), but its neighbor Switzerland actually boasts the higher GDP and life expectancy with 35 percent less government spending as a percentage of GDP. Switzerland even has the higher GDP per capita than the United States. And it's landlocked. France didn't become wealthy from its big government ways. Actually, France was rich before it instituted its big government welfare plan.

As you can see from this table, rising per capita incomes, economic growth and low levels of unemployment are more often associated with a smaller, not larger, government and more economic freedom. Many studies show that government spending as a percentage of GDP above 25 percent actually slows down economic growth and job creation. So it looks like it's a knockout for small government. We have a champion!

So why aren't the big government contenders paying more attention to the little guys? Huh, fair question. See ya on the next episode of Hotnomics – not your typical economics class.

Translated by Jadranko Brkic