Prosperity Brief: People Work Better Than Government

The more we trust people, the more they prosper.

Hello friends!

This week reinforced a lesson that cuts across nearly every policy debate in America:

People work better than government.

That may sound obvious, but it’s amazing how often policymakers forget it.

Whether the topic is poverty, jobs, housing, taxes, budgets, or inflation, the instinct in Washington and many state capitals is often the same: create another program, spend more money, or expand government authority. Yet the evidence continues to point in the opposite direction.

Take economic mobility. In my recent article for The Daily Economy⁠, later republished by RealClearMarkets⁠, I challenged the myth that America has a permanent underclass trapped in poverty.

The reality is that most people move through income brackets over their lifetimes as they gain skills, build careers, start businesses, and accumulate wealth. The goal of public policy shouldn’t be managing outcomes—it should be expanding opportunities.

The same principle showed up in the latest U.S. jobs report.

While headlines celebrated job growth, my analysis found much of the increase came from government and government-dependent sectors. A bigger government payroll is not the same thing as a stronger economy. Lasting prosperity comes from productive private-sector growth, entrepreneurship, investment, and innovation. That’s where rising living standards come from, not government expansion.

Housing affordability tells a similar story. In my recent RealClearMarkets commentary⁠, I argued that America’s affordability challenges stem largely from supply constraints.

Too many policymakers focus on restricting growth instead of expanding supply. Whether it’s housing, energy, water, or data centers, abundance—not scarcity—is the path to lower prices and greater opportunity.

The question of ownership remains central as well. In my latest property tax work, including Wyoming’s path toward property tax relief⁠, I continued making the case that if government can tax your property forever, ownership is incomplete.

Families should own their homes, not rent them from government through perpetual taxation. The solution starts with spending restraint and using surpluses to reduce and ultimately eliminate property taxes.

That same spending restraint is at the heart of the Sustainable Budget Project. Whether examining Alabama’s $18,000 spending problem⁠ or Alaska’s resource trap⁠, the lesson remains remarkably consistent: government spending that grows faster than population growth plus inflation eventually leads to higher taxes, slower growth, and fewer opportunities.

States that want long-term prosperity should limit spending, return surpluses, and allow taxpayers to keep more of what they earn.

Americans are also learning the consequences of bad fiscal and monetary policy through record credit-card debt. As I explained in The Real Reason Credit Card Rates Are So High⁠, higher borrowing costs aren’t primarily about greedy banks.

They’re largely the result of inflation, Federal Reserve policy, rising funding costs, and increased lending risks. When policymakers abandon fiscal discipline, families eventually pay the price.

One of the highlights of the week was seeing my work published internationally through the Instituto de Liberdade Econômica⁠, where I made the case that free-market capitalism remains the greatest engine of prosperity ever discovered.

No economic system has done more to lift people out of poverty, improve living standards, and expand opportunity.

My economic episode this week was on how government failures hurt our ability to prosper in many ways.

I also talked with Marc Short about conservatism and the new right: How the New Right Echoes the Left with Marc Short | LPP 201

Across all these issues, the lesson is the same. Economic mobility requires opportunity. Housing affordability requires abundance. Ownership requires property rights. Growth requires entrepreneurship. Prosperity requires freedom.

Government has an important role, but it cannot replace families, businesses, churches, charities, and communities. Those institutions remain the real engines of human flourishing.

The more we trust people, the more they prosper. And that’s exactly what public policy should be designed to achieve.

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Let People Prosper,

Vance Ginn, Ph.D.
President, Ginn Economic Consulting
Former Chief Economist, White House OMB