Creating versus consuming

Most governments the world over and Keynesians of all stripes would have us believe that consumers drive the economy and during periods when consumer demand lags governments are needed to step in and spend to "save" the economy.  However, Austrian economics teaches that it is not consumers consuming that generates wealth for a society but rather producers.  Steve Jobs creating must-have gadgets never before seen (or at lease never seen in with the combination of aesthetics, software, and overall user experience) makes society better off.

The US government would have us believe that when the government spends money it is a net positive to the economy - even factoring in government spending as part of GDP calculation.  By definition, however, all government spending really does is take by force from one person and give to someone else.  Even worse, though, there is a huge layer of inefficient bureaucracy between the one who had a portion of his wealth taken by force and the one who received the benefit of this wealth transfer. 

Governments take but entrepreneurs create.  Government spending acts as a drag on the economy and leads to miss-allocation of resources.  Innovative thinkers and producers create capital stock in an economy, capital stock that creates real wealth and leaves everyone better off.  I say we cast off the inefficiencies of governments (see here, here, here and here) and leap to the unknowns of a free market economy.

Learn More
Visit mises.org with a enormous wealth of resources on Austrian economics.  Robert Wenzel of Economic Policy Journal recently had a post with 30 readings for learning about Libertarianism.