As explained in the video, scholarly research indicates that government spending has a negative impact on economic performance when total outlays exceed about 20 percent of economic output. And since the
burden of government spending in America now consumes about 40 percent of gross domestic product, the United States clearly is on the wrong side of the Rahn Curve.
"The American people's anxiety about excessive government is quite appropriate," said CF&P FoundationPresident Andrew Quinlan.
"This video shows that government is far too big and therefore is undermining prosperity."
"The United States should emulate Hong Kong, where the burden of government spending is about 20 percent of economic output." added the video's narrator, Dan Mitchell of the Cato Institute. "Even better, the United States should return to the kind of government envisioned by the Founders, which meant total government spending of less than 10
percent of GDP."
Government spending can promote economic growth if money is used for core "public goods" such as rule of law and property rights. But the burden of government spending in the United States and other
industrialized nations is far higher than needed to finance such activities. Citing scholarly studies, this video examines the Rahn Curve, which graphically illustrates the negative impact of excessive