We have heard it said that cutting government spending at this juncture would knock percentage points off of GDP. So, despite the fact that borrowing at our current rate is unsustainable it is said that borrowing and spending must continue until the economy strengthened.
Among Washington intellectuals this kind of reasoning makes sense. The rest of us are free to see it differently. Most importantly, deficit spending and cheap money do not cause economic growth. Never in the history of the world has deficit spending caused an economic expansion.
Those of us who follow natural law, know that the time to do the right thing is the very moment the right thing to do is known. At any given moment, it appears that a cut back in government will be bad for the economy. That is because human behavior is assumed to be constant. A mind that is trained to consider only packaged ideas assumes people will not adjust in positive ways and incentives do not change. Government control of economic activity is assumed to create certainty but in economic matters certainty doesn’t exist. What is acquired is only a perceived certainty.
In a free market setting no effort is made to create certainty. It is assumed that all market participants will put their personal resources to their highest and best use and they always do.
Free markets accept uncertainty as constant and normal. With that comes optimum employment and incomes. What is important to remember is that when government tries to create certainty success is only imaginary. Uncertainty remains no matter what so we might as well let people have their liberty with free markets and high living standards.