Economic Growth and Growth in Government

This research examines links between economic growth and growth in government. The dichotomy surrounding this issue pits those people contending that increases in government size correlated with lower levels of economic growth against those people who, first, contend that direct correlations do not exist and, second, posit that increase in the size of government can yield social benefits.

One of the most pervasive cries in the United States since the late-1970s has been the demanding lower taxes and less government intrusion in the economy. The principal justification for these demands is that taxes and governmental intervention in the economy deter economic growth. The only cry louder that the one demanding lower taxes and less government is the one (mostly from the same parties) demanding higher defense spending and protection from unfair foreign competition. The usual definition of unfair foreign competition from these quarters is any foreign businesses that develop production efficiencies allowing them to price their products below those of producers in the United States [Canadian lumber and European steel are two current examples]. Conveniently overlooked in such calls for action is the implication that the role of government must grow to accommodate the requests.

Regardless of such contradictory demands, the contention that direct-links

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cepted collective bargaining and provided a system of high wages, more or less guaranteed employment, and fringe benefits, while labor accepted managerial prerogatives in the organization of work and largely refrained from major strikes. In contrast to the United States, Western Europe has a history of explicit connections between the public and private sectors. Following the end of the Second World War, universal social security and a tax-funded National Health Service were institutionalized in the United Kingdom, where government has been decidedly oriented to redistribution and social welfare. The United Kingdom differs from the United States in both the degree the type of government involvement in the social welfare system. The development of industrial capitalism in Western Europe led to citizen demands for a whole range of new state services for citizens of those societies. Nations first sponsored major communication systems, then mass education systems. Both of these developments contributed to the consolidation of a series of civil societies partly bounded by the territories of nations and partly by the less well-defined boundaries of Western Europe. Next, nations organized health systems, followed by the beginni
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Approximate Word count = 2403
Approximate Pages = 10 (250 words per page)

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