Economic Growth Stupidity

According to this article (Breitbart, via Drudge), the European Union economic brain trust is considering limiting the work week, i.e. reducing the hours that existing employees work so unemployed folks can be hired to fill the gaps.

This is the absolute height of lunacy and denial of basic economic prinicples. Here's what will happen:

1) They cut back on the hours productive people work, thereby reducing the wages they earn and the money they have to spend.

2) The productive people therefore spend less and reduce their consumption.

3) The businesses where the productive were spending now have reduced revenue and will have to either raise prices or reduce costs. What's the easiest way for them to reduce costs? Reduce manpower.

4) The value of the money that people have to spend is now even less still because prices are higher.

5) All in all, this will lead to more unemployment, not less.

What should they do?

1) Reduce taxes.
2) Remove regulation.
3) Let the free market stretch its legs and grow.

The economic masters of the European Union need to read up on the "broken window fallacy".

In the mean time, "John Galt, please call your office."