Mitt Romney pitches smaller government: Is his target realistic?

2012-10-05 Yahoo News

IFN och IFN-forskarna Magnus Henrekson och Andreas Bergh citeras I en artikel I Yahoo News:
While President Obama sees sizable government as fostering economic growth, Mitt Romney wants to cap federal spending at 20 percent of GDP. Is that goal feasible – and economically helpful? Is the question asked by Yahoo News. Referring to a 2011 study for the Research Institute of Industrial Economics in Sweden, authored by Andreas Bergh and Magnus Henrekson, Yahoo News quotes the study concluding “that as the size of government goes up, the pace of economic growth is harmed. Noting that Sweden has enjoyed strong growth alongside a large government, they still argue that ‘this does not mean low-tax countries can increase taxes without expecting negative effects on growth’.”
Yahoo News concludes: “That said, many economists also agree with Obama's point that public investments play a role in growth. The Sweden-based survey itself argued that investments in human capital (education) can increase growth.”

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