Government is a Competitor

An often misunderstood lesson: Government spending crowds out private spending with its added disadvantage of having zero multipliers.

When the U.S. Government borrows to spend money, it takes funds that ordinarily would be used by the private sector. This is especially the case when interest rates are not being artificially and dangerously nudged lower by the federal Reserve into a liquidity bubble.

At the same time, research shows that government dollars spent do not multiply in the economy as do private industry dollars. This, despite political jargon by left-wing politicians. (See the Earl J Weinreb NewsHole® comments.)