3.2.3 Government Spend

A government’s primary objective in spending money should be to enable it to serve the people – to defend them, to maintain law and order, and to make a variety of benefits, services and facilities available.  To do this it extracts a proportion of the wealth that has been created within its jurisdiction, through taxation.

The following sub-sections examine the ways in which government spending affects the economy:

  • A government can fund a range of public services, as an alternative to people paying for what they use (
  • It can make investments in infrastructure and in research, to help all sectors of the economy to function better (
  • It can make transfer payments to people, as benefits, to protect them from economic hardship (
  • All government spending can be seen as displacing private enterprise and reducing its competitiveness (
  • Government spending is an economically contentious issue, giving rise to sharp disagreements about its scope (



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This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition03/323.htm