Business & Economics: November 2015 Archives

Magic Lever of Economic Growth

Megan McArdle says that there's no magic lever for economic growth. Maybe there are a bunch of levers that deliver economic growth when you don't pull them?

Republicans and Democrats suffer from a common delusion that there is some magic lever we can use to make the economy grow, if only we elect a president with the vision and iron determination to grab that sucker and pull really hard. This illness presents differently, depending on the patient. Democrats think the government needs to get right in there and micromanage our way back to 1950, preferably Sweden in 1950, while Republicans think that the road to prosperity is paved with low marginal tax rates. But no matter what the symptoms, it is still a sickness. Economic growth is mostly a matter of millions of individuals making decisions to save, invest and consume in new and better patterns -- and as amazing as this may sound, most of these people are thinking about things other than the government when they make those decisions.