government

How can an economist save the Rain Forest?

How can an economist save the Rain Forest?

Readers Question: Endangered rain forests, wild fish, elephants and more are examples of the tragedy of the commons. What would economists recommend to save, rain forests or fish stocks?   Firstly, the tragedy of the commons  is a situation where there is overconsumption of a particular product / service because rational individual decisions lead to an outcome that is damaging to the overall social welfare. The problem with rain forests is that people may feel an…

Government spending cuts to 35% of GDP

Government spending cuts to 35% of GDP

Firstly, I thought it might be helpful to talk about the different types of spending cuts that people refer to.An actual cut in government spending. e.g. one year we spend £39bn on defence, the next year that is cut to £38 bn. This is a nominal cut of £1bn. The real cut will be even bigger. A cut in real government spending. If inflation is 3% and government spending on education rises by 1%, that is a real cut of 2%. Departments will still have to cut back on wages…

Benefit spending in the UK

Benefit spending in the UK

A quick look at benefit spending in the UK. This is a follow up to  Social security spending. Thanks to HM Treasury for help in finding useful data set. Source: Public Expenditure Statistical Analysis 2014 | Data Chapter 5 – 5.2 Social Protection spending Firstly, there has been a modification to the category of government spending, now labelled – ‘Social protection spending’ – See: Social protection spending. This is not just welfare benefits. It includes personal social services, e.g paying…