The private sector is what creates an economy, not the government. All wealth comes from the private sector. Government consumes it.
The larger the size and of the government compared to the size of the private economy, the worse the economy gets. So anytime somebody says "They ought to pass a law against this!" or "They ought to pass a law against that!", or "The government needs to rush in and save us against this or that!", what you're doing is hiring a bunch of people that are going to have frictional jobs that do not create wealth. They don't add to the economy and they get paid by extracting wealth from the private economy.
So our prosperity falls with increasing size of government, it rises with a decreasing size of government.
Simple as that.
- Source, The Hidden Secrets of Money