Nobel WInner Vernon Smith Says ” Please, No More Government Spending!”

At the DailyBeast, Vernon Smith, Nobel laureate in economics, and member of Reason’s board of directors, says deficit “stimulus” is not the road to economic recovery. It’s the problem, not the solution.

Our best shot at increasing employment and output is to reduce business taxes and the cost of creating new start-up companies. Don’t subsidize them; just reduce their taxes even as they become larger; also reduce any unnecessary impediments to their formation. This is strongly indicated by the business dynamics program of the Bureau of Census and the Kauffman Foundation which has tracked new startup firms in the period 1980-2005. The entry of new firms net of departing firms in this period account for a remarkable two-thirds more employment growth (3 percent per year) than the average of all firms in the US (1.8 percent per year).

Hat tip to Will Wilkinson.