If you knew economic growth and new job creation begin to slow when total government spending is larger than about 25 percent of the economy, and you knew total government spending in the United States is about 36 percent of gross domestic product (GDP) - would you propose policies to make government larger or smaller to create more jobs and boost economic growth? Over the last few decades, many economists have done studies on the "optimum" size of government. A new study just completed shows the optimum size of government is less than 25 percent of GDP. Optimum is defined as that point just before government becomes so large as to reduce the rate of economic growth and job creation. Rather than increasing the size of government, the empirical evidence shows that sharply reducing taxes, regulations, and government spending down to at least 25 percent of GDP would do the most to spur economic growth and create more jobs over the long run. There is virtually no empirical evidence - in the United States or anywhere else - to support the belief of economists of the Keynesian school that a big increase in government spending will make matters better, rather than worse. 

What could be more appropriate, on the eve of the TTP Carefree Rendezvous, than to hoist a pint of Four Peaks Ale brewed here in Arizona to an inspiring woman Republican governor who drives liberals out of their minds because she is a pro-family, pro-life, pro-Christian, anti-tax, anti-government spending, anti-illegal immigration Reagan conservative.  Nope, we're not talking about Sarah Palin - however much the HFR is happy to hoist a glass in admiration of her at any time.  We're talking about... ... Right next to the HFR Saloon is the Schadenfreude Bar, which serves goblets of frothy glee over liberals' misfortunes.  One patron was happy that Tim Geithner was going to be confirmed as Treasury Secretary.  "It will be wonderful to have a guy that cheats on his taxes be in charge of the IRS," he said.  "Now millions of us will say, ‘If he can, so can I'." ... Let's spice up the HFR this week, shall we?  With a spice that can be a solution to terrorism.  Oh, and a microbe that can be a solution to energy independence.

Much has been made of the challenges facing Mr. Barack Hussein Obama, who assumes office in what appears to be the early stages of the worst economic downturn since the Great Depression.  More should be made of the great opportunities he possesses. We Americans are more than two trillion dollars poorer, and counting, as a result of the subprime mortgage crisis, and our confidence has been badly shaken.  But power is relative.  So here is a key fact to keep in mind: The United States is more powerful today relative to our adversaries than at any time since Aug. 29, 1949, when the Soviet Union exploded its first atomic bomb.

You work hard, take care of your family, and pay all the taxes the government says you owe as is typical of honest, upright citizens. But what happens to your tax money? It is now going to "bail out" firms that pay their senior executives millions of dollars a year. Congress also intends to spend your tax dollars on an $825 billion "stimulus program" filled with many dubious projects and plain old-fashioned "pork." Many good economists who have looked at the details of the stimulus package believe it has much more "de-stimulus" than stimulus in it and will make the American economy worse off rather than better off. While you may have thought you are required by law to pay taxes on all your income, you learn the "important" folks in Washington seem to think paying taxes is optional - for them.

George W. Bush, private citizen, left Washington for Dallas today with the quiet dignity that was typical of his personal behavior during the eight tumultuous years of his presidency.  Mr. Bush leaves office as the most unpopular president in the history of polling. But it will be a decade or more before we have the perspective necessary to place the Bush presidency in history. Conservatives, for the most part, have been disappointed by Mr. Bush.  During his presidency Republicans lost all fiscal discipline.  Many of his appointments were alarmingly mediocre.  Even when he was doing the right thing, he did a poor job of communicating why. Still, we will miss his basic goodness, and his steadfastness. But I suspect that in six months or so, it will be the liberals who miss Mr. Bush most.