Sunday, October 28, 2012

Squeezing the Free Market Out

If you add up the cost of government, the cost of health care not paid by the government, and the cost of higher education not paid by the government--you come up with 50% of GDP. What these costs have in common is that they're unavoidable. By comparison, in countries like France and Germany, all these expenses are covered by the government--and most of them have tax levels lower than 50%. If you added the costs of regulations in America, the number would be pushing 55% of GDP. In 1960, that number was more like 35%, and it would have been 30% if we were spending as little on the military then as we are now. At this rate, the involuntary percentage of our GDP will reach 70% by 2040. Can an economy that is 30% free and 70% socialist avoid stagnation? Can it even avoid decline?

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