Private, not public, sector creating growth

The American economy is made up of two sectors, a private sector that is collecting natural resources and value adding to them and a public sector that consists only of the various government services.

As the private sector expands more jobs are created which creates more wealth value and results in greater tax revenue to the government. North Dakota and Montana are examples of strong private sector growth from natural resource collection.

As the public sector expands government costs increase causing higher taxes or printing of more paper money. Continued excessive public sector spending causes the economy to stagnate and inflation sets in from excessive printings. States on both coasts are examples of public sector overspending.

Government then must raises taxes, which further reduces the private sector activity which further reduces tax revenue. This results in an economic downward spiral we know as stag-flation, a stagnant economy and inflation together.

When the president stated that “there is nothing wrong with the private sector economy,” it became clear that he does not understand, both sectors depend on the private sector for financing and there has to be financial balance between them in spending and taxation.

The election in Wisconsin was over this very issue of imbalance between the public sector spending and the private sector taxation.

One political party promotes public sector growth through debt to create jobs, the other promotes private sector growth to create jobs and proposes to reduce the public sector size and spending.

LLOYD WALLACE

Hope