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 (220.127.116.11).
- It can make investments in infrastructure and in research, to help all sectors of the economy to function better (18.104.22.168).
- It can make transfer payments to people, as benefits, to protect them from economic hardship (22.214.171.124).
- All government spending can be seen as displacing private enterprise and reducing its competitiveness (126.96.36.199).
- Government spending is an economically contentious issue, giving rise to sharp disagreements about its scope (188.8.131.52).