Mind on My Money

I like reading your columns and I think you have a lot of great ideas, but I have to raise a counterpoint here.

A lot of economists talk about growth and miss out on a much more important factor -- quality of life. Can you take a little time and do some research on quality of life and try to find where the happiest people in the world live? We had some excellent growth during the Bush years but how about the statistic of how all of that public wealth that went to programs to help the poor just ended up sitting in the bank accounts of the richest 1 percent? Or how about pouring all that money into surveillance technology designed to protect our economic growth in the pharmaceutical industry and create new jobs in the private prison industry? How about we sacrifice a little growth this time and let our undereducated and malnourished citizens enjoy a more comfortable life? Give Naomi Klein a read sometime and see if you still hold this view.

"Reducing the public to private ratio spurs growth.
Increasing this ratio retards growth."

Since California, New York, Minnesota spend
over twice as much per capita as Oklahoma,
Tennessee, and North Carolina that means
that according to your assertion, Oklahoma,
Tennessee, and North Carolina should be doing
much better economically than California, New York,
and Minnesota.

http://www.ppinys.org/reports/jtf2004/stlocalspending.htm

"On the other hand, China began its economic
liberalization in 1978. Since that time, its
economy has grown 70 times bigger."

Hello, economic liberalization and public to
private ratios are two very different things.
So basically you are comparing apples to oranges.

"We are now struggling with poor economic growth."

No we are struggling with economic contraction.
There is a difference between poor economic
growth and *negative* economic growth.

"What should we do? Reduce the size of the public
sector relative to the private sector!"

Well there is this little thing called the
banking crisis. You seem to think we should
do nothing about this, but just about every
economist (conservative and liberal) has
concluded that the federal government
needs to deal with this, or the economy
will become much, much worse.

Terry

Any undergrad economics student learns about externalities and public goods problems, but apparently finance professors and Republicans ignore such things.

I must concur with the previous comments, economic growth alone is not the sole objective variable in the optimization problem of life. Several alternative optimization models have been developed and promoted over the years, so this also isn't a new or radical perspective.

Consider the Legatum Prosperity Index (http://www.prosperity.com/ranking.aspx )... of the top ten countries in Liveability (mostly northern European nations), only two are in the top 10 in terms of economic competitiveness.

Money isn't everything.

I think that the budget growth percentage should really be lower, obviously many people seem to believe that this would lead to a poor quality of life in our nation. Having more public services does provide more good for the nation as a whole, but it does also cost us a lot. For right now, I think we need to remain stable on the goods and services that are provided to the public until our economy shows some progress of recovery. It's unfortunate, however, I think that we need to find a good public plan that we can stick to in the future rather than throwing money to different public services.

I am a strong advocate for a smaller government. Over the past year we have seen the government budget and US debt sky rocket. We now have companies and even a lot of financial institutions that are in some way owned by our government. We see our budget deficits grow every year, how can we expect the government to do any better running these companies. We can't sustain our country being constantly in debt.

I agree with the assessment of this ratio in determining economic health, but this still leaves a lot of room in how to manipulate that ratio. Slashing government programs would affect the ratio immediately, but there is no guarantee of sustained growth as a result. In some instances, focusing on reducing the ratio by stimulating increases in the private sector may be a more effective long-term strategy.

i agree with your article wrong decisions will destroy the economy which is already like taking some last breath