akuma587 said:
That's your assessment. Many economists would say the exact opposite, that the government's share of GDP should substantially increase when GDP drops for the health of the economy.
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Well, with how many economists were claiming that the housing market wasn't in a bubble in 2006/2007 and didn't see the impending credit crisis until it had already become a massive problem do you really feel confident that economists have a strong understanding of the economy?
The economy really isn't that complicated and, much like a forest fires are needed to have a healthy forest, you must have economic downturns in order to keep your economy healthy. Government intervention to prevent companies from failing is like protecting trees with pine-beetle infestations from the forest fire; in the long run the government is doing more damage because the lack of moral hazard will lead to other companies making the same mistakes without fear of the consequences. Unemployment is like burnt trees that have collapsed on the forest floor, and when the government produces government jobs it is like taking this burnt material away from the forest to make it look neater; but the burnt material is the nutrients that lead to the forest re-growing stronger than it was before, and the unemployment leads to an affordable and motivated workforce which is necessary for the next generation of companies.
The health of the economy is best maintained by the government staying out of the way of people, allowing them to develop the technologies and products of the future, and to encourage them to sell their products to as many people as possible (through free trade).
