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When will people realise Government spending is bad! watch

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    Government spending is bad for growth, jobs and advancement.

    Ill give you an example.

    A resturaunt owner pays £50 in tax

    The tax collector collects that £50 from him and hands the £50 to the government

    The government pays the collector £50 for his work

    The collector then goes to said resturaunt and orders £50 worth of food and pays.

    The business loses out because yes, even though its got the £50 back its lost money paying for cheifs/food/table.

    Government should be cut to 10% of the economy not the 50%+ currently
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    No...
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    That Tax Collector has an easy life, collecting from a single restaurant eh?
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    Basic Keynesian approach

    Government spending is proven to increase aggregate demand.
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    (Original post by rugbyladosc)
    Basic Keynesian approach

    Government spending is proven to increase aggregate demand.
    So why in japan/china when they severly cut taxation they gained more in tax and the best economic growth for hundreds of years?
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    (Original post by Gap4)
    So why in japan/china when they severly cut taxation they gained more in tax and the best economic growth for hundreds of years?
    Severely cutting taxation doesn't mean government spending falls?
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    (Original post by Gap4)
    Government spending is bad for growth, jobs and advancement
    Not as bad as you seem to think.. I'll give you an example:

    • A resturaunt owner pays £50 in tax
    • He fills out his tax return and pays the taxman himself
    • The admin fees involved amount to far less than 1% of tax revenue
    • The tax money is largely spent on paying for things/work
    • This money filters back into the system and boosts growth through the multiplier effect - though there is 'crowing out' to consider

    If you cut taxes to 10% you'd have virtually no state aparatus and society would break down pretty quick :rolleyes:
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    Aside from the fact that your reasoning is unbelievably simple, you do realize that this is torn apart by pretty much every Social Democratic country in existence?
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    I love the way you have simplified this problem JK. Its not that simple
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    (Original post by rugbyladosc)
    Basic Keynesian approach

    Government spending is proven to increase aggregate demand.
    And lower taxation also increase aggregate demand so its a moot point.

    The reason we have a high level of government spending isn't from an economic standpoint though, its social and political. We can't have a free health service, big army etc etc without high taxes/government expenditure.
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    (Original post by Gap4)
    Government should be cut to 10% of the economy not the 50%+ currently
    Surely this point undermines your thread title?
    If you still think there should be government spending, then you can't really think it is bad can you? You can think a large amount of government spending is bad, but not government spending as a whole.
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    (Original post by Foo.mp3)
    Not as bad as you seem to think.. I'll give you an example:

    • A resturaunt owner pays £50 in tax
    • He fills out his tax return and pays the taxman himself
    • The admin fees involved amount to far less than 1% of tax revenue
    • The tax money is largely spent on paying for things/work
    • This money filters back into the system and boosts growth through the multiplier effect - though there is 'crowing out' to consider


    If you cut taxes to 10% you'd have virtually no state aparatus and society would break down pretty quick :rolleyes:
    What? Society wont break down. Plenty of countries have low taxation around 10% and they have much better societies and standards of living. If the government gets smaller over time and the private sector gets bigger then society wont break down :rolleyes:
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    (Original post by Joluk)
    And lower taxation also increase aggregate demand so its a moot point.

    The reason we have a high level of government spending isn't from an economic standpoint though, its social and political. We can't have a free health service, big army etc etc without high taxes/government expenditure.
    It's not a moot point. OP said government spending is bad for growth, jobs and advancement but actually it is the opposite. Government spending improve aggregate demand, giving people more disposable income which they might recycle into the UK economy providing jobs with the multiplier effect and stimulating growth. But you're right, dropping taxes would also stimulate spending, but some economists think that people will just start saving.

    And yeah we do need high taxes for NHS and the army but thats not the point. The point is government spending generally increases AD, stimulates growth and reduces unemployment.
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    It is bad, except for public goods e.g. Street lighting/Armed forces.. Unfortunately though, you are a moron.

    As far as current spending, welfare and stimuli are concerned.. ugh
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    (Original post by Gap4)
    Government spending is bad for growth, jobs and advancement.

    Ill give you an example.

    A resturaunt owner pays £50 in tax

    The tax collector collects that £50 from him and hands the £50 to the government

    The government pays the collector £50 for his work

    The collector then goes to said resturaunt and orders £50 worth of food and pays.

    The business loses out because yes, even though its got the £50 back its lost money paying for cheifs/food/table.

    Government should be cut to 10% of the economy not the 50%+ currently
    A company is formed to make roads.

    The company builds roads and places a toll booth at every junction to make a profit.

    Road company owner pays £50 in tax

    The tax collector collects that £50 from him and hands the £50 to the government

    The government pays the collector 0.05p for his work

    The collector at the end of the month tries to drive to the shops but is delayed by the traffic build-up caused by the toll collection.

    Collector gets to shops but finds he's spent most of his money getting to the shops.

    Collector sad
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    People are entitled to their own opinion, but when I'm treated like an idiot for believing that high government spending is one of the keys for a happy and content society, I take offence.

    Especially when the OP is a complete cretin.
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    (Original post by rugbyladosc)
    Basic Keynesian approach

    Government spending is proven to increase aggregate demand.
    Yeah because nobody ever thought he might be wrong (its not like he himself changed his mind every 5 seconds or anything) - Hayek didn't exist, did he?

    Even Keynes said public spending should never exceed 25% of GDP and he was vehmently opposed to socialism and was actually rather elitist, I'm surprised lefties love him so much really.
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    (Original post by NGC773)
    What? Society wont break down. Plenty of countries have low taxation around 10% and they have much better societies and standards of living. If the government gets smaller over time and the private sector gets bigger then society wont break down :rolleyes:
    I can't think of any large country with a tax take of 10% that enjoys a better standard of living than us...let alone "plenty".
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    Yes, a resturaunt pays £50 in tax, except he's earning 000's profit. if anything he should pay more tax lol
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    (Original post by CandyFlipper)
    Yeah because nobody ever thought he might be wrong (its not like he himself changed his mind every 5 seconds or anything) - Hayek didn't exist, did he?

    Even Keynes said public spending should never exceed 25% of GDP and he was vehmently opposed to socialism and was actually rather elitist, I'm surprised lefties love him so much really.
    Largely because he's an inoffensive fellow who was a tad left and his economic ideas were adopted, to a lesser or greater extent, by several countries giving the left a certain legitimacy. He was definitely no Socialist though.
 
 
 
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