The evidence is really piling up….

Limited government has become the cause du jour for the right these days, after over a decade of social issues such as gay marriage and abortion driving many a campaign and cause. Certainly these issues maintain relatively high profiles (abortion has been inextricably woven into the health care debate, and gun control is still at the tip of the tounges of those warning against increased government intrusion), but these days halting government expansion is the biggest concern for conservatives. It makes sense. Many conservatives are left bemoaning the fact that too little too late was said about these issues during the Bush years, and the legendary defecits that were piled up during that era are now only being heightened by Democrats compulsion to be all things to all people.

Indeed, the much touted government intervention into our economy seems to have done little in the short term to create jobs. Indeed, government intervention in the area of unemployment is actually HURTING employers. (H/T Hot Air) From the Associated Press:

• Chuck Ferrar, who owns a liquor store in Annapolis, Md., expects to pay $9,000 in unemployment taxes next year, up from $3,000 this year. Health care costs for his employees will rise by $8,000, or 17.5 percent. “When you start adding this up, it turns into real money,” he said. “If I lose an employee through attrition, I will not replace him. You can’t afford to do it.”
• Sam Schlosser, owner of Plymouth Foundry Inc. in Plymouth, Ind., said his unemployment tax bill could double next year. Revenue at the family-owned company, which makes iron castings for machine parts, has fallen about 50 percent, he said. In case of higher taxes, his company may have to consider layoffs, he said.

Why is this the case? Because states are required to change their rates each year in accordance with the rate of unemployment. But because the economy is so deep to begin with many states are running out of cash. The real rub?:

But the severity of this recession has bankrupted many states’ trust funds and forced them to borrow from the federal government. States eventually must pay back the loans. Otherwise, the federal government can raise taxes on their businesses.

So let me get this straight–a government program that is designed to help the jobless actually puts them in a worse position by making it harder for businesses to hire? Typical interventionist logic.

The good news, though: there’s evidence that fiscal conservatism does and has worked. A new working paper from two Harvard economists indicate that not only do tax cuts make it more likely for an economy to rebound, but spending adjustments both help the overall fiscal picture AND are less likely to spur a recession. The money quote, via The Corner:

“Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions.”

You can check out the paper in its entirety here. Despite this academic exercise, I’m afraid that the American people are destined to learn the results of statism through hard won experience this go around.

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