Comment 27269

By Rusty (registered) - website | Posted November 11, 2008 at 11:54:08

A Smith,

Why do we have to assume that there is a cause and effect between overall government spending and economic growth? If only life were that simple...

I doubt that any useful analysis has been done to make a correlation between SPECIFIC (you can't juts lump all spending together) forms of government spending and economic growth in related areas. If we want to make this kind of anaysis we have to get specific - i.e. what investments were made in the auto sector for a period, and what returns were made. And even then the analysis of those stats would need to be completed carefully - there are so many factors at play.

As I have written about before (in relation to a government funded career planning course I took), the government does not appear to conduct a lot of research into it's various schemes. Government spending, to the regular Joe Public at least, really is a big black hole. Who knows what has worked and what hasn't?

I think your logic is way too simplistic, and too selective. Does your theory apply to other governments over the years? Does it apply to other countries?

If we want to get into spending versus prosperity analysis then we need to get into the nitty gritty. Some spending works and some doesn't - we just need to work out which is which.

Cheers

Ben

Ben Bull. Cap'n Bully has a new Blog! http://bullysmoviereviews.blogspot.ca/ or something like that.

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