Readers Question: Is large government spending bad for economic growth? to what extent does empirical evidence support this assertion? How Government Spending Might Lead to Lower Economic Growth Higher spending leads to higher taxes. Higher income taxes may discourage people from working. High corporation tax might discourage firms from setting up in that country. (e.g. …
General government gross debt is a definition of government borrowing used by the EU. Generally, UK government debt is published as ‘public sector net borrowing’ – There are two measures of this public sector net borrowing – one which includes financial sector intervention, and another which excludes. see: UK National Debt source: Stats on UK …
This is a list of government spending as a % of GDP. The highest on this list is Zimbabwe with 97.8% of GDP. Amongst developed countries, the highest levels of government spending include Iceland (57%), Sweden (52%) and France (52.8%) China’s government spending accounts for only 20% of GDP
Readers Question: I am much in favour of governments defaulting on what they owe to private financial institutions (as opposed to other governments). This would be in line with the ideas fuelling the current OCCUPY THE WALL STREET movement. I would very much like someone to comment if this is at all possible and practical. …
Readers Question: Just a quick one. Are UK banks paying interest on the government bailout they received? Not as far as I am aware. When the UK bailed out the bank we actually bought stocks in the bank. We gave money in return for buying shares. Companies usually pay dividends to shareholders, though the two …
Can Governments Increase the Rate of Economic Growth? Governments often seek to increase the rate of economic growth. Higher growth rates improve public finances, increase economic welfare and help reduce unemployment. However, it is debatable how much the government can actually increase the rate of economic growth. The greatest potential for increasing economic growth occurs …
Readers Question: How can a larger government fiscal deficit case a larger international trade deficit Firstly, it is important not to confuse the two deficits. Government fiscal deficit occurs when government spending is greater than tax revenues. The deficit is the annual government borrowing requirement, measured by Public Sector Net Borrowing. International Trade deficit implies …
The coalition expects 490,000 public sector jobs to be lost by 2014-15 as a direct result of its drastic spending cuts, Danny Alexander, the chief secretary to the Treasury, has accidently disclosed. (link to Guardian) In addition the spending cuts, wage freezes and job losses will have a knock on effect to the rest of …