As I recall, as the size of government (in terms of taxes/spending) as a share of GDP increases, GDP growth per capita decreases. Regulations also have a negative effect on the economy. The problem, though, is that while everything works out perfectly on paper, I don't actually have a lot of real-world examples or data to point to in order to defend this position. Can any of the forum's fiscal conservatives provide the references that I need? Remember: correlation doesn't imply causation unless you have a LOT of data points so that you can adjust for other factors (for example, a country can experience tremendous economic growth for a while if it just engages in insane deficit spending).
Obviously I'm not going to be stating my political preferences, but I will provide you with data that tracks government spending as a percentage of GDP, and GDP growth per capita. If there is other data you would like, let me know either on here, or by PM.
All of the graphs are on a logarithmic scale. That means that a straight line represents steady growth. The dashed lines represent the polynomial trendline. If you want further information, I can go back as far as 1900, but that will take more time. That would be charts that run 30 years from 1900-1930. If you would like me to do an overlay of the two graphs, I can have that for you by tomorrow mid-day. The 1900-1930 outlays and receipts as a percentage of GDP will take me possibly another day (mostly because I have other stuff to do tomorrow). ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------ www.gpoaccess.gov/usbudget/fy12/xls/BUDGET-2012-TAB-1-2.xls http://www.ggdc.net/maddison/Historical_Statistics/horizontal-file_09-2008.xls Per Capita GDP will be in the next post
------------------------------------------------------------------- ------------------------------------------------------------------- In addition, if you would like information for other countries, let me know. That, too, will probably take some time, though.
Ummmm... I was hoping for something that had been processed a bit more, and yes, included data from a cross-section of countries.
If you give me a list of countries you would like me to use, I will do similar work for their respective GDP and spending. From there, I can run some basic statistical analysis for you. If you are just looking for the correlation between GDP and spending, I can do that for you. I just need a little more specificity.
Well, I think that the most accurate results would be from countries that aren't "cheating" with unchecked deficit spending.
That's very vague. I'm going to need some form of specifics as to what you're looking for. No country with a deficit of 40% GDP or higher?
Ummm... probably more like "no country that has had a deficit of 5% or more of GDP in the past 20 years"
I can do that (though it might take some more time since I'd need to find the countries as well), but that also writes off the United States, making an inapt comparison.
Depends on what the government is spending money on. Most government spending is either positively correlated with GDP growth or neutral with respect to GDP growth. Some types of government spending can reduce GDP growth, but that's the minority. There's diminishing returns that come into play as well. Right now, we're not even close to enough government spending to be causing growth problems. Depends on the regulations. Generally speaking, regulations provide long-term benefits from stability at the cost of short-term growth for some sectors of the economy. The data does not support your position. Government spending goes not, in general, reduce GDP growth.
