Governments Cannot Direct Investment

From today’s Open Europe news summary:

In its staff report on Germany, the IMF recommends that the government boost investment spending by 0.5% of GDP per year, over the next few years, to help encourage private investment and boost growth in the eurozone. Meanwhile, the Bundesbank said in its monthly bulletin that it expects German economic growth to slow over the coming months.

A hundred years ago Ludwig von Mises shattered the idea that government can spend money rationally when he wrote Economic Calculation in the Socialist Commonwealth.  Rational economic calculation is only possible from private property owners.  IMF bureaucrats are seldom right about anything, and this recommendation is true to form.

Patrick Barron

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