Continuing the theme that other parts of the world still exist, this thought on Brazil’s upcoming presidential election. In a Wall Street Journal piece about the Brazilian presidential candidates’—all 13 of them—big economic plans with no money to implement them, the item’s author offered this bit:
Mr. Bolsonaro has raised the most hopes in financial markets of tackling the endemic spending problem. …his top economic adviser, economist Paulo Guedes, has promised investors fiscal austerity….
It’s sad that “journalists,” whose interns surely know better, continue to insist that reducing government spending is somehow “austerity.” How is it austerity to leave more money in the hands of the people who earned it? How is it austerity to leave the private economy free to spend its own money on its own imperatives instead of the Know Betters who populate government spending it for them on Know Betters’ “goals”?
Reduced government spending—and reduced tax rates, the two cannot work effectively in isolation from each other—far from being austere, allows an economy to grow.
The Brazilian government needs to get out of the way of the nation’s private economy. Its high spending and high taxing are what constitute austerity. Brazil’s citizens live austere lives because the government confiscates their money—to the tune of 40% of GDP—and it spends that confiscated money, not on those citizens’ wants or needs, but on government salaries and pensions, and on schools and hospitals that would be well supported and staffed in a free market economy.