Friday, November 17, 2006
Big government leads to poor government!
"Small" government is required for real growth.
I have always believed that big government leads to an inefficient economy as the public sector sees stronger growth than the private sector, and this is found both in central, regional, and local government. The ratio at which the public sector consumes economic energy grows exponentionally and stifles vibrant economic activity.
Today the Institute of Economic Affairs makes a report which savages the 'predatory' tax regimes of Gordon Brown and argues that if public spending, which now accounts for 48% of the economy, was seriously curtailed, then economic output would be 1,000 billion pounds higher today! Yes 1,000 billion pounds!
The report argues that the optimal size of public spending in a mixed economy is around 35% of the national wealth.
But we all knew that NuLabour was going to give us a big dose of tax and spend didn't we?
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