Does “big government” need to be scaled down?
The conservatives are calling for government spending to be cut to head towards balancing the budget. Public opinion seems to be backing this view but the government argues that reducing spending will ensure the recession continues. Vote "yes" if you agree that government needs to be scaled down and "no" if you disagree.
You can also add to the debate by leaving your comment at the end of the page.
Big government leads to unsustainable debt
Big Government means a government that is involved in many aspects of society: welfare, housing, education, culture, etc. One of the two central means of involvement is financial support[[the other being the tax policy]]: Grants, subsidies, direct funding, buyer/seller incentives, etc. Each of these forms of financial supports costs money.
The amount of money that is taken up by such support schemes is usually proportional to the amount of people that benefit from it. Health care expenses are proportional to the number of people enjoying it, Unemployment money - to the number of unemployed, etc. Combine this proportionality with the actual amount of benefactors, and you get massive expenses.
To make this large expense unsustainable, we have to realize that it is always growing: either because the number of benefactors rises due to population growth, or because the expenses required to achieve the desired level of service rises (as in the rising cost of medicine and medical equipment. The later reason is the more important, because the desired level of service is set by a public who does not directly feel the higher taxes (on the talented, hard-working minority) and their effect on the economy; the demands therefore rise always, except in a strong crisis - and even then the public may object to cutbacks, as in Greece today.
Since expenses keep rising, the economy must keep growing to maintain this, but as the tax burden grows, it gets harder and harder, resulting in very small growth in west-european countries in the last decade. When a crisis comes, the already-strained economy cannot keep up, tax income drops suddenly, government debt explodes, and the world shuns trade with that government, a situation faced in the past by Argentine and other countries, and possibly in the near future by Greece and some other countries.
Reducing government roles to basic ones will ensure that in other fields demand for service will be directly tied to the ability to pay for it, and remove the danger of unsustainable debt.
The reason we ended up in a recession is becasue we left markets largely to themselves. Government must be bigger in order to regulate more effectively. Government should be nationalising, not privatising. Through the free market and privatisation risk runs wild. Through government control we can ensure fair and just solutions without risk.
To cut spending now could easily result in 5 million unemployed. Labour has already begun to lower unemployment and that's precisely because of the measures they've taken to nationalise banks and inject more money into the public sector.
The statement in favor of regulation doesn't answer the actual question and sounds more like socialist rhetoric. Regulation does play a part and indeed is necessary to ensue that financial markets, industry or public services work in an effective manner. But the difference between good regulation and bad regulation is vital and it should not be there as a brake on business working effectively. To nationalise more would be a disaster and mirror the mistakes that we made in the 1960's and 1970's when government nationalised and regulated to a heavy price. Government doesn't have to get bigger in order to ensure that fair and just solutions without risk are created.
What do you think?