Economics Lesson

John Robb and Elizabeth Warren may ignore it, but all real growth comes from growth in productivity.

The debate about the “stimulus” is bizarre, because it does not matter. Or more precisely, it lessons economic growth slightly while making people slightly happier about it. If you want economic growth, then invest in capital improvements, such as better communications, better machines, and better people. The stimulus does two things: it borrows money that would otherwise be invested to spend, and it makes peopel feel a bit better, so they are less likely to support some even crazier law. Fortunately, it looks like much of the stimulus/rebate checks will be used to pay-down debt, minimizing the displaced investment and hopefully keeping the opium-like mood benefits “free money” provides.

If you want economic growth, import high-skill workers. Currently, the Congress limits the number of high-skill workers who can help our economy.

If you want economic growth, trade more with other countries. Currently, the Congress is refusing to vote on a free trade deal with Columbia.

If you want economic growth, make it tax-free to invest. Currently, Barack Obama and Hillary Clinton support raising the capital gains tax.