What's an optimal level of government spending?

T. A. Gardner said:
About 25 to 30% of GDP. Anything more and you drag down the economy pretty severely.
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What makes you think that? Remember, the majority of the countries that have created and sustained general prosperity were over 30%. The EU's countries are in the 40s, on average, and even conservative Switzerland is up over 30%. Many of the countries that have had the highest average GDP growth rates over the past generations also have been well over 30%. China's in the mid-30s, for example. China's economy has doubled in size in real terms about every 10.84 years, versus every 34.57 for the US. For that matter, at least for the 1960-2018 period, the economic doubling time has been shorter for most liberal countries than for the US -- including Iceland, Luxembourg, Norway, Finland, and Sweden.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(real)_per_capita_growth_rate

I'm just not seeing evidence of 30% as any kind of "danger zone" threshold.
 
Concart said:
Any spending with positive ROI is good.
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I don't think I'd go that far, since you need to consider opportunity cost. Like what if a given government program would return 1% on investment, but simply not taxing that money and letting the private sector spend it as they'd like would return 20% on it? I think generally, in that scenario, the program would be a bad idea. But when you look at real-world experience, I think the fact that most countries that are doing well have bigger relative non-military government spending than us suggests we could probably get a higher average ROI if we were a bit less reluctant to boost government spending (on non-military matters).
 
AssHatZombie said:
you're comparing insolvent fiat economy nightmares with other insolvent fiat economy nightmares.
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I'm comparing every single major nation in the world that has achieved a decent quality of life for its people. When you list all of those, you find that the US is close to being an outlier when it comes to government spending, since our non-military government spending is lower than that for every other big wealthy nation, and nearly every other wealthy nation even if you count the little ones.

I think in other contexts, this kind of "peer benchmarking" would be given a lot of weight. Like if a company were to realize that it spends less on training its employees than all its major competitors, and nearly all its competitors of any size, it would think long and hard about whether maybe it should be spending more. Or if an NBA team realized that it was taking fewer 3-point shots than all the other playoff teams, and that there were even just two or three non-playoff teams taking fewer 3-point shots than it was, it would strongly consider working on shooting more of them. When the large majority of those who are succeeding are doing something more than you are, it's suggestive (but not definitive) evidence that you could be more successful if you did more of that thing.
 
The GREAT AMERICA the right wants to go back to is the fifties



We all know that is the truth



The economic reality created by the FDR years
 
Mina said:
This is adapted from something I wrote in a response to another post (which I nicked from an argument someone made in the Salon forums).

Over the past few decades, the US has tended to have unusually low levels of government spending relative to GDP, at least by the standards of major wealthy nations. Generally speaking, the governments of wealthy democracies tend to spend somewhere between 25% and 55% of GDP on non-military matters.

COVID-era numbers have been distorted both in terms of spending and GDP, but here's how it looked shortly before the pandemic:

https://web.archive.org/web/20200316...pending-to-gdp

After adjusting for 2019 military spending, non-military government spending was highest in France, at 54.14%, the EU as a whole was at 43.8%, and the US was at 34.4%. Only a trio of wealthy countries were lower than the US: Switzerland at 31.7%, and South Korea at 27.57%, and Ireland at 25.4%.

So, imagine you were training for a marathon and you were wondering whether maybe you should cut back on your miles, for fear of overtraining and getting hurt. Or are you undertraining, and you should increase your mileage? Well, what if you found out that you were already closer to the bottom of the range of mileage than the middle, in terms of the runners you were competing with? What if you know that some of your peers who are excellent marathoners train a lot more miles than you do, but that almost none trains a lot less than you?

That would suggest you could probably improve with more mileage, and that there's not much risk you're already overtraining. If nearly everyone who trained fewer miles than you was a much slower marathoner, it would strongly suggest decreasing your miles would hurt your times.

Similarly, if nearly every country that spends less of its GDP on non-military government spending than us is a much poorer country than us, it suggests that moving in their direction is likely to hurt our prosperity.

We KNOW, from real examples, that it's possible to have a wealthy democracy with much higher non-military government spending as a share of GDP than we have -- and to sustain that.... 15 or 20 points higher, in fact. There's no reason to think we'd be entering into a "danger zone" if we boosted such spending by eight points, for example, since that would still leave us a bit below average by EU standards, and still far below several wealthy countries. By comparison, if we dropped it by eight points, we'd be in a range where no other wealthy nation has sustained besides Ireland (which only did it by way of accounting tricks[SUP]*[/SUP]).

With us knowing we could move up our spending a lot while still being in good company, whereas moving our spending down would soon have us only in the company of poor nations, I'd argue it makes more sense to experiment with higher government spending, rather than risking still lower.

[SUP]*[/SUP][SUB]Irish GDP is overstated, since it's a tax shelter where GDP shows up on paper, from international corporations overpaying their own Irish subsidiaries for services, merely to recognize revenues in that tax haven. It's not actually creating that much value.... merely hosting it for accounting purposes. That, in turn, results in making their government spending look artificially low relative to GDP.[/SUB]
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Within the budget. Next!
 
evince said:
The GREAT AMERICA the right wants to go back to is the fifties



We all know that is the truth



The economic reality created by the FDR years
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Back when Americans could pay for their housing for the month with 3 days worth of work? Yes!
 
Mina said:
I don't think I'd go that far, since you need to consider opportunity cost. Like what if a given government program would return 1% on investment, but simply not taxing that money and letting the private sector spend it as they'd like would return 20% on it? I think generally, in that scenario, the program would be a bad idea. But when you look at real-world experience, I think the fact that most countries that are doing well have bigger relative non-military government spending than us suggests we could probably get a higher average ROI if we were a bit less reluctant to boost government spending (on non-military matters).
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That's a taxing question, not a spending question. If the ROI is lower than the cost of borrowing the money, it is good. Cost of borrowing currently is very for the government.
 
The more the better, but they should source their own needs rather than buying from private suppliers.
Taxpayers should be buying goods and services, not contributing to corporate profits.

If a necessary industry isn't profitable, just move it out of the private sector.
 
Mina said:
What makes you think that? Remember, the majority of the countries that have created and sustained general prosperity were over 30%. The EU's countries are in the 40s, on average, and even conservative Switzerland is up over 30%. Many of the countries that have had the highest average GDP growth rates over the past generations also have been well over 30%. China's in the mid-30s, for example. China's economy has doubled in size in real terms about every 10.84 years, versus every 34.57 for the US. For that matter, at least for the 1960-2018 period, the economic doubling time has been shorter for most liberal countries than for the US -- including Iceland, Luxembourg, Norway, Finland, and Sweden.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(real)_per_capita_growth_rate

I'm just not seeing evidence of 30% as any kind of "danger zone" threshold.
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Here is a website which claims to give the % of spending vs GDP including state and local. 2022 is over 37% of GDP. (It looks like it gets it's data from US Budget historical documents so no reason to think it isn't relatively accurate.)
https://www.usgovernmentspending.com/spending_percent_gdp

It allows you to go back and look at the other years. We have almost always been above 30% for all government spending since at least 1980. Of course spending doesn't equate to taxes since the Feds run a deficit almost every year.
 
Ask yourself why republicans are the one that crash the economy



And Democrats are the ones that have to clean up the messes republicans create




All clearly shown if you use the actual numbers and facts
 
evince said:
Then you should be behind Democratic Party economic ideas that created those years of prosperity
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Democrats caused this shit and want free Americans to be serfs. Fuck You.

This is America, not feudal England, bitch!

Your president Clinton gave state-of-the-art missile tech to China, bitch.
 
Matt Dillon said:
Idk about all that. I just know how it was, and how it is now. How it got to be how it is now needs to be reversed in order for things to be fair for upcoming Americans.
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If you don’t know that


Then quit pretending your piont of view is based on facts idiot
 
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