Center for Freedom and Prosperity Foundation
For Immediate Release
Monday, June 29, 2010
New CF&P Video Explains the
Burden of Government Spending
(Washington, D.C., Tuesday, June 29, 2010) A new video released today by the Center for Freedom and Prosperity Foundation (CF&P) cites the latest academic research to show that there is too much government spending in America and other industrialized nations. Entitled, “The Rahn Curve and the Growth-Maximizing Level of Government,” the mini-documentary discusses the Laffer Curve-type relationship between government spending and the economy.
As explained in the video, scholarly research indicates that government spending has a negative impact on economic performance when total outlays exceed about 20 percent of economic output. And since the burden of government spending in America now consumes about 40 percent of gross domestic product, the United States clearly is on the wrong side of the Rahn Curve.
“The American people’s anxiety about excessive government is quite appropriate,” said CF&P Foundation President Andrew Quinlan. “This video shows that government is far too big and therefore is undermining prosperity.”
“The United States should emulate Hong Kong, where the burden of government spending is about 20 percent of economic output.” added the video’s narrator, Dan Mitchell of the Cato Institute. “Even better, the United States should return to the kind of government envisioned by the Founders, which meant total government spending of less than 10 percent of GDP.”
- Government spending can promote economic growth if money is used for core “public goods” such as rule of law and property rights. But the burden of government spending in the United States and other industrialized nations is far higher than needed to finance such activities. Citing scholarly studies, this video examines the Rahn Curve, which graphically illustrates the negative impact of excessive government spending.
CF&P Foundation has also released more than three-dozen mini-documentaries since 2007. These videos include Tax Competition Primer, VAT-Hidden Tax, Global Flat Tax Revolution, Cutting the U.S. Corporate Income Tax, Promoting Prosperity, Obama’s So-Called Stimulus, Obama’s Deferral Proposal, Case Against Class-Warfare Tax Policy, President Obama’s Dishonest Demagoguery on Tax Havens, Six Reasons Why the Capital Gains Tax Should Be Abolished, a three part series on the Benefits of Tax Havens and a another three-part series on the Laffer Curve.