Tags: Government | economy | winners | losers

University of Georgia Economist Jeffrey Dorfman: Government Hampers Economy by Picking Winners & Losers

By    |   Friday, 25 July 2014 03:44 PM

The government is supposed to take actions that will boost the economy, but instead it has acted in ways that hurt the economy, says Jeffrey Dorfman, an economist at University of Georgia.

"One of the reasons that economic growth has been so slow in this recovery is that our politicians have chosen so many policies which bring benefits to specific groups but have negative impacts on the economy as a whole," he writes on Forbes.com.

"If you are in a group that benefits (autoworkers, some bankers, the uninsured), the policy is a good one. However, if you want faster economic growth, these policies are the opposite of what should be done."

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The economy has grown only about 2 percent since the recession ended in 2009. GDP contracted 2.9 percent in the first quarter, though many economists expect it to expand 3 percent or more for the rest of the year.

"When the government picks winners and losers, economic growth slows down," Dorfman writes.

"Economic growth is fastest when the market is the most free. There are plenty of social welfare functions that would approve of policies to bail out the banks and the autoworkers and to provide insurance to the uninsured. They may be good social policy. However, they are bad for economic growth."

Meanwhile, Joel Naroff, president of Naroff Economic Advisors in Holland, Pa., and a member of the Newsmax Financial Braintrust Alliance, has a mixed view of the economy. "The economy is mediocre, but it's getting better by the month," he told CNBC.com

Wages, which rose only 2 percent in the 12 months through June, are "the missing link in this whole economic recovery," Naroff said.

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The government is supposed to take actions that will boost the economy, but instead it has acted in ways that hurt the economy, says Jeffrey Dorfman, an economist at University of Georgia.
Government, economy, winners, losers
335
2014-44-25
Friday, 25 July 2014 03:44 PM
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