Rick Lowe
Most people know by now one of my favourite topics is that the government needs to cut spending.
Well when I mention this around the politically connected, and it doesn't matter which party they might be affiliated with, I'm told I need to have my head examined because the incumbent party will lose the next election if they do so.
What if you knew that the opposite is true – politicians are penalised when they spend too much?
In a recent research summary by Stephen Slivinski of the Mercatus Center, released December 14, 2010 gives us some interesting tid bits to consider:
The Political Avantage of Restraining Spending
"When lawmakers cut spending, conventional wisdom seems to indicate that voters will oust those politicians come the next election cycle. Yet such a claim has little support empirically. A number of studies over the past 20 years seem to suggest that, all things being equal, there is no systematic relationship between spending cuts and adverse political outcomes. In fact, the opposite may be true: there may instead be a political advantage to restraining spending."
Definitely, if the cuts in spending are coupled with government reducing the tax burden on private enterprise, which could further spur economic growth, which won’t happen immediately, but in the short term. In the Bahamas, its my belief that a government would have to do this at the beginning of their term to see the benefits, whilst they are still governing, not in the middle.