What did George Washington, Thomas Jefferson and Ronald Reagan have in common? They understood and believed classical economic theory as taught by Adam Smith.
George Washington said, “Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”
Thomas Jefferson said, “A government big enough to give you everything you want, is big enough to take away everything you have.”
Ronald Reagan said, “Government is not the solution to the problem. Government is the problem.”
Adam Smith published “The Wealth of Nations” in 1776. The founding fathers were very familiar with what Adam Smith had to say. Ronald Reagan received a degree in economics before John Maynard Keynes published his theories.
Keynesian economic theory suggests that the government can fine tune the economy like a master mechanic can fine tune an automobile. Unfortunately, government intervention in the economy never has a positive result.
The founding fathers knew that a free market capitalist economy did not need to be controlled by the government and that government interference in the marketplace only cause’s problems.
For the United States economy to turn around, free market principles will have to be employed once again. The problem will be in finding politicians who understand and are willing to employ free market principles.
In 2014, it is unclear how many Republican congressional candidates know or believe classical economic theory.