Monday, July 25, 2011

Stats of the day

It's the spending, stupid:
In 1900, the governments of the world’s most advanced economies taxed and spent, on average, 10 per cent of respective GDP each year. By 2000, they taxed and spent 33 per cent – France alone taxed and spent more than 50 per cent.
In its most recent analysis of government spending, the Paris-based Organization for Economic Co-operation and Development says its 34 member countries now spend, on average, 44.6 per cent of GDP – and that 10 of them spend more than 50 per cent.
Neil Reynolds outlines the consequences of such profligacy:
If [the high spending countries] continue to dispense two-thirds of their respective economies, chances are they’ll live with near-zero economic growth. If they live with near-zero growth, they’ll need to commandeer more GDP. In this spiral, they’ll never have enough GDP, never enough growth.
But don't expect the state to wither quickly -- its instinct for self-preservation is too great.

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