From Del. Glen Glass:
My Dear Constituent,
Governor Martin O’Malley recently came out with his budget – its four volumes. You may borrow my copies if you’d like… As I read through it I couldn’t help but notice that his budget is based one of the most misguided theories ever promulgated, namely: “The General Theory of Employment, Interest and Money” by John Maynard Keynes. The theory basically states that in a time of recession or long term bear markets, the government should stimulate the economy by creating jobs and/or generating demand. The theory suggests that if more people have money to spend then they will spend it! By stimulating demand, the supply side of the economy is stimulated and business flourishes.
However, Governor O’Malley and the Democratic Leadership fail to realize that jobs cannot simply be created to stimulate supply or demand; just as increasing spending on public transportation 30% over five years didn’t increase ridership one iota. The value of something is not created by the amount of labor or time one puts into a product or service; rather, by the level at which people want, or are willing to pay for a good.
This type of Keynesian expansionary fiscal policy tends to exert little or no effect on aggregate demand. The employment for people who work for public transportation is certainly good for those individuals; however, it will not create the proper necessary demand because people are smart when it comes to government spending. Households know and anticipate the higher taxes that will result from the debt and reduce their spending (and increase their savings) in order to pay for the reckless government spending. Just like current taxes, debt tends to crowd out private spending.
My alternative philosophy says: less taxes, regulations and government spending. Individuals through self-interest will produce the goods and services they desire. This approach to how people handle their lives advances liberty through increased innovation and entrepreneurship. My philosophy statistically and unequivocally leads to higher standards of living, lower infant mortality and more prosperity.
Please join me in my fight for less taxes, regulation and government spending. Together, we can win this fight.
Your Delegate and Servant