• Healthy Spending Numbers for June Illustrate Again: the Free Market Works

    Daily Surge Summary: Vigorous spending in June confirms the soundness of basic free market principles. 

    Concerned the economy might be running out of gas after two-and-one-half years of go-go growth?

    Mairead McArdle spreads the word that robust U.S. spending in June beat analysts’ expectations – and this after a disappointing first quarter stirred up fears the nation’s economy might be cooling.

    Retail sales increased 0.4 percent in June, surging past economists’ projections of a 0.1 percent increase, according to a Commerce Department report published Tuesday. Purchases of furniture, building materials, and motor vehicles, among other items, increased.

    Markets are still expecting the Federal Reserve will be cutting interest rates despite the solid report coupled with consumer-spending increases in April and May.

    The buoyant numbers assuaged fears that the economy was heading into a downturn after a weak first quarter that included declining business investment and an inventory surplus among some companies. Consumer spending sank during the early months of the year in the aftermath of the record 35-day partial government shutdown that stretched from December through January.

    Congressional Budget Office estimates are it deprived some 800,000 federal workers of their paychecks for over a month, costing the U.S. economy $3 billion, gone forever.

    That shutdown, understandably, goes a long way toward explaining the economically tepid earlier months of 2019. How could a series of money blows like that not negatively impact the nation’s financial condition and outlook?

    On the other side, the overall shape of the economy confirms what has been readily apparent in the American experience under the administrations of presidents like Calvin Coolidge, John F. Kennedy, Ronald Reagan, George W. Bush, even Bill Clinton; and, yes, presently during the tenure of Donald Trump: When tax-rates, tax-policy and government regulation are arranged so as to make it more worthwhile for people to work, start or expand businesses, invest and invent, the economy in general benefits. If individuals and/or companies are convinced they can make more profits and keep more of those profits, the economy blooms.

    This dynamic has been demonstrated over and over and over again in the last century and this new one alone. It also happens to comport with common sense: Make it as beneficial as possible for folks to labor and they will.

    It’s a shame the statist Left fights acknowledgement of that palpable principle as stubbornly as it does. The ones who suffer for Progressives’ fecklessness is, well, just about everybody.

    Image: Image by StockSnap from Pixabay 

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