3.2.3 Government Spend

(This is a current page, from the Patterns of Power Edition 3 book contents.  An archived copy of this page is held at https://www.patternsofpower.org/edition03/323.htm)

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 (3.2.3.1).
  • It can make investments in infrastructure and in research, to help all sectors of the economy to function better (3.2.3.2).
  • It can make transfer payments to people, as benefits, to protect them from economic hardship (3.2.3.3).
  • All government spending can be seen as displacing private enterprise and reducing its competitiveness (3.2.3.4).
  • Government spending is an economically contentious issue, giving rise to sharp disagreements about its scope (3.2.3.5).

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