Calvin Coolidge and Hong Kong Economics

Honk Kong might be the only nation on earth whose government takes from taxpayers, what it needs for essential services, but no more.

The result: Hong Kong enjoys one of the greatest living standards in the world; it’s per capita income is higher than Japan’s and every large nation in Europe. Shockingly, it does this with just 1 natural resource, a great deep water seaport.

Hong Kong enjoys this success, despite those European nations having: vastly greater riches, larger populations, highly skilled work forces, centralized locations and a decades head start in industrialization and technology.

Hong Kong’s per capita income nearly capitalforbusiness matches that of the United States, While it’s Cost of Government is Just Half

Per Capita Income U.S. $46,381.

Per Capita Income H.K. $42,748

Cost of Government U.S.–37.6%
Cost of Government H.K.–18.6%%

Source: 2011 Index of Economic Freedom, The Heritage Foundation

Compare the data to Europe’s four largest Economies, and Japan. Per Capita Income is shown as PCI, the Cost of Government as CoG

Hong Kong ______PCI $42,748, CoG 18.6%

Ireland _________PCI $39,469 CoG 42.0%
United Kingdom __PCI $34,619 CoG 47.3%
Germany ________PCI $34,212 CoG 43.7%
France _________PCI $33,679 CoG 52.8%

Source: 2011 Index of Economic Freedom, The Heritage Foundation

Honk Kong’s per capita income is also larger than Japan’s. Japan’s economy once soared like Hong Kong’s. It then started expanding government spending, power and reach into the private sector. Since then, Japan has had almost 20 years of sluggish growth and high debt. Just like President Obama’s $862 billion so-called Stimulus, the Japanese government implemented 10 stimulus programs in the 1990’s, with the same sluggish, almost negative results.

Per Capita Income Hong Kong $42,748
Per Capita Income Japan —–$32,608

CoG Hong Kong 18.6%
CoG Japan —–37.1%

Source: 2011 Index of Economic Freedom, The Heritage Foundation

The United States also expanded government, far too much under George Bush but expanded it far more and much more suddenly under Barack Obama. The Federal Reserve and the Congressional Budget Office have both projected long periods of sluggish growth, high unemployment, almost unimaginable deficits and a continuing explosion of long term debt, since Barack Obama assumed the presidency in 2009. Forecasts for economic growth and job growth were very positive before Nancy Pelosi and Democrats took over congress in 2007.

Why Has Hong Kong Had Such Success? Summary

Hong Kong allocates its resources properly. Foremost, workers retain a high percentage of their income to save, invest and innovate in the private sector. This high degree of individual freedom, especially freedom from excessive government taxation, and excessive government regulation, makes for highly honest and productive government. Hong Kong is virtually corruption free as measured yearly by the Index of Economic Freedom.

The huge portion of corruption in most governments, takes place as a result of those governments expropriating excessive taxes from their most productive workers. In most cases those funds get misused for special interest voting blocks and self gain. A great deal of the corruption, results from redistribution. The productive workers having their money turned over to the non-productive, create a second powerful negative–long term dependency, than a third powerful negative for those who pay–the welfare giving congressman, gains an entire constituency of voters, for redistributing money that doesn’t belong to him; this vicious cycle keeps feeding on itself.

A nation’s most valuable resource is its people and the productivity achieved through the skills of those people. A necessary adjunct is for those workers to make decisions with their own resources–their own capital–in the private sector, where it is most efficient.

Investors worldwide, have invested billions of dollars in Hong Kong for decades. This is due to the integrity of all areas of government-the legislature, the courts, the Constitution and financial institutions.

Hong Kong has done what America did for its first 140 years. America followed the U.S. Constitution, limiting government to its Constitutional obligations, skyrocketing us past all world economies. Under Herbert Hoover and Franklin Roosevelt, government costs, government programs, regulations and loss of individual freedoms, launched a new era toward too much government power.

In the 1920’s President Calvin Coolidge, made deep cuts in taxes and other government costs and regulations. The economy and living standards soared as did innovation, per capita income and revenues to government. A huge chunk of the national debt-25%-was actually paid down.

Let’s get back to 140 years of limited, Constitutional Government which gave us roaring prosperity, freedom and strength. Hong Kong seems to use the tenants of our Constitution, more than we do.

Tell potential candidates to limit FEDERAL SPENDING to 18% of GDP. If they don’t, we’ll support opponents who will.

2011 Index of Economic Freedom: http://www.heritage.org/index/

Mick McNesby is a former tax advisor, consultant and negotiator. He was a frequent guest on political talk shows in Atlantic City, N.J., discussing the benefits of the lower cost of government. He ca

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