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The 28 percent problem ...

August 5, 2008 - Lee Smith
The Sentinel will run a column Thursday (8/7) on its editorial page by Walter Williams that I find fascinating. It deals with the issue of how well our economy COULD be doing if there were not certain obstacles in its way. I believe this is interesting because while people wage political battles as if our economy were a zero-sum game, fighting over their share of the "pie," citizens generally seem to forget that an economy is not static. That is, wealth grows over time. This is evident in simple facts. You, for instance, do not live in a log cabin or ride a horse to work. The accumulation of capital, its investment, the advent of new technologies, education, the application of labor and other factors CREATE wealth. Wealth is not a bunch of paper bills at a vault at the bank. It is the standard of living you enjoy. According to Williams' column, our $14 trillion economy (the total value of the goods and services we produce every year) would be closer to $18 trillion if it were not for the drags of government intervention in the forms of Social Security, the federal income tax and welfare programs. In other words, the overall wealth of our nation is 28 percent lower than it could be because of these factors. That translates into a lower standard of living for you. The next time you dream of a better life, consider working to reduce and eliminate government programs.


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