Disagreements about Government Spending

There is a clear conflict between the interests of taxpayers and those who benefit from public services and transfer payments.  The former want to pay as little tax as possible.  They don’t want living off benefits to be a comfortable alternative to work.  What Mark Blyth termed The Austerity Delusion was popular with many taxpayers on both sides of the Atlantic, but he argued that “the European experience has shown yet again why joining the austerity club is exactly the wrong thing for a struggling economy to do”.

An RSA report, Addressing Economic Insecurity, starts from the opposite viewpoint.  It defines economic security as “The degree of confidence that a person can have in maintaining a decent quality of life, now and in the future, given their economic and financial circumstances.”  It argues that benefit payments should aim to give people enough flexibility to make the best employment choices – thereby benefiting the whole economy.

Later sections in this chapter examine other contentious economic issues raised by government spending:

  • Governments need to behave responsibly in managing their spend so that it can be funded by taxation (
  • There is disagreement about who should pay most tax, to fund government spending (3.5.1).
  • Individualists and collectivists have economic reasons for their sharply differing views about tax and spending (3.5.2).
  • There are disagreements on the economic legitimacy of economic management: achieving a balance between conflicting interests and freedoms (3.5.9).

Later chapters review the political mechanisms for reaching agreement on the magnitude and scope of government spending (6.7.1), and the moral justifications for State funding of socio-economic rights (, both of which are highly contentious.


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