In today’s Wall Street Journal, one Hannes Swoboda, a member of the European Parliament from Austria, argues that Europe Can Spend Its Way to Growth. He believes that what the nations of Europe (and presumably everywhere else) need is ways to “channel additional funds into national treasuries.”
Herr Swoboda ought to take the time to read what another Austrian, Ludwig von Mises, had to say about the size of government and economic growth. Government spending is, emphatically, not what catalyzes economic growth. Because resources are limited, all that government spending does is to divert them away from uses determined in the non-government sector (where people can’t imposes taxes or debase the currency and stand to lose if they make foolish decisions) and into uses determined by politicians, who can imposes taxes, debase the currency, and don’t lose if they make foolish decisions.
With politicians like Swoboda holding the reins of power in most of Europe, it’s hard to see how most countries there escape from stagnation.