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An Economic Paradox: SelectUSA, Government's Expansion, and Private-Sector Growth

President Obama signed an executive order on June 15 to create SelectUSA, a new bureaucracy that acts as a one-stop-shop for government subsidies, in the hopes of attracting foreign investors with the promise of free taxpayer money. Through SelectUSA's creation, the absurd paradoxical nature of the president’s economic philosophy is apparent, which is the misguided notion that government expansion stimulates long-term private sector growth. It’s truly disappointing that this awfully Keynesian notion still persists after the massive failure of the fiscal stimulus, because if there is anything we should have learned from the $787 billion government spending spree, it is that public spending comes at the expense of private spending. Bryan Riley from the Heritage Foundation had some scathing but truthful words regarding SelectUSA:
I imagine a bunch of government bureaucrats were asked to come up with a way to promote foreign investment. Instead of recommending anything to actually make the United States a more attractive environment for investors, the best they could come up with is a website listing all the government incentives (handouts) that are available and promoting the United States to foreign investors.
Instead of borrowing more money to finance a new bureaucracy, thereby reducing the amount of loanable funds available for private entrepreneurs, the administration ought to think proactively about how to best improve the business climate within the U.S. Reducing the 70,000 pages of burdensome regulations that cost our economy a whopping  $1.7 trillion every year would be a start. However, such action is anathema to the ethos of Progressives and Keynesians alike -- as they see the success of the private sector contingent upon the guidance of enlightened bureaucrats in Washington.