Dr Eamon Butler of the Adam Smith Institute needs to think harder about this:
“I was interested to see this remark by the hugely intelligent John Stepek of Money Week, in one of his morning bulletins:
Every government, authoritarian or democratic, is terrified of growth slowing. Why? Because they’ll lose their jobs. Whether that’s at the end of a rope or more benignly at the ballot box doesn’t make any practical difference in economic terms. The fact is that the people in power will always do their damndest to keep a boom going for as long as possible. And that’s what ultimately does the economic damage.
Absolutely spot on… I have wondered (rather worrying) if democracy is our problem – that politicians simply have to keep promising higher spending and lower taxes to win elections…
I would like to see the UK and US in particular fess up to the fact that big over-expansions are what produces big crashes. Once they do fess up, then we can do something about it. Like have some kind of constitutional limits to government spending, borrowing, debt, and tax levels. This is exactly what the President of Georgia – one of the fastest-growing countries in the world, following its economic liberalisations – wants to do. His Liberty Act would amend the constitution to cap government expenditure at 30% of GDP… budget deficits at 3%… and public debt at 60%.”
Quite apart from the incongruous sight of a professed libertarian wondering about the benefits of democracy and idolising a petty despot who cares little for freedom or democracy (something which the Parallax Brief has highlighted about the Adam Smith Institute before), none of this actually makes sense.
If government expenditure and budget deficits were limited to a certain percentage of GDP, government spending would rise during good times and fall during bad times. One doesn’t need PhD to see the consequences of this: booms would be fueled as government spending increased with GDP, and busts would be made worse as the government stopped spending, putting more people on the dole and sending more businesses into bankruptcy.
Surely Dr. Butler has actually described the opposite of the government ideal? Surely government should try to smooth the economic cycle, not accentuate its bumps?
And if politicians are inevitably drawn into a taxation and spending bidding race, that’s an argument for better economic education, creating an environment in which more responsible politicians can flourish, or perhaps changing the way fiscal policy is made and enacted, not for introducing a fixed, arbitrary, economically nonsensical, pro-cyclical new law.

Libertarians sure know how to pick ‘em. First there was the 2006 Ludwig Von Misus institute report on Somalia, 
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