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Subject: Government Spending levels: Why change them? rss

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Philip Thomas
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I'm a conservative, and that means I don't like changing things.

One of the things I'm not too keen on changing is the level of government spending. At least not without some good reason. Mostly this is because I'm just sceptical of change, but partly it is because I think we (in the developed world) have the mix about right- and partly it is because messing with government spending does things to the economy and I'd like to look before I leap.

A good reason (IMHO) to change the level of spending is fiscal conservatism: if the budget isn't balanced then it may be appropriate to adjust spending to achieve balance- although sound conservative principles wold suggest also adjusting taxation (to keep the overall balance roughly the same).

A bad reason (IMHO) to change the level of spending is radical fiscal dogma: the belief that spending is an inherently good (or bad) thing and therefore we should always cut (or raise) spending. It is a bad reason because it has no end in sight, except for total state control/the dismantling of the state.

Poll

Should we change the level of government spending (in your home country)?
No, leave it as it is.
Yes, but only enough to balance the budget.
Yes, increase it
Yes, decrease it
      33 answers
Poll created by Philip Thomas
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Xander Fulton
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The Amish might have some thoughts you'd be interested in regarding the idea of 'not changing things that work just fine the way they are, thanks'...
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Philip Thomas
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XanderF wrote:
The Amish might have some thoughts you'd be interested in regarding the idea of 'not changing things that work just fine the way they are, thanks'...


The Amish way of life works for them. But I am only a moderate conservative: I am happy to accept gradual change where necessary.
One of the things I don't want to change about today's society is that it is constantly changing! I'm just sceptical of deliberately adding to that change, through government intervention for example.
 
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Euen McMurry
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The level of government spending here in the US isn't as worrying to me as much as the insane inefficiency of said spending...
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Damian
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XanderF wrote:
The Amish might have some thoughts you'd be interested in regarding the idea of 'not changing things that work just fine the way they are, thanks'...

The Amish lifestyle is not based on "don't change it because it works just fine". The Amish are willing to incorporate technology. What they're not willing to do is sacrifice their particular set of values. They've managed to incorporate many modern technologies quite ingeniously.

I don't think that's the lesson you were going for though.
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Philip Thomas
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braveheart101 wrote:
The level of government spending here in the US isn't as worrying to me as much as the insane inefficiency of said spending...


Yes. I think we can probably agree that government waste should be cut: that doesn't necessarily mean cutting spending though (the savings could be spent on other, less wasteful government programmes).

 
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Damian
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[q="Philip Thomas"I think we can probably agree that government waste should be cut:[/q]
Everyone agrees that government waste should be cut. Now get enough people to agree what, exactly, "government waste" is. Everyone likes to talk about how wasteful government is, but as soon as you mention a specific bit of "waste" a significant quantity of people will rush to defend it.
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Mac Mcleod
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damiangerous wrote:
[q="Philip Thomas"I think we can probably agree that government waste should be cut:

Everyone agrees that government waste should be cut. Now get enough people to agree what, exactly, "government waste" is. Everyone likes to talk about how wasteful government is, but as soon as you mention a specific bit of "waste" a significant quantity of people will rush to defend it.[/q]

Which is why only a serious sequestration approach will actually work.
But even then only if you stick with it and you punish people who try to scam (like the FAA administrators did with the sequestration).

You need to make it clear- "Your budget is NOT going back up. Live with the new numbers." More realistically, a freeze in new government spending for a few years followed by a low cap (2%?) for several years would be a more realistic approach.

 
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Boaty McBoatface
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Would this not all depends on what they spend it on?

You cannot work on a budget based solely on the amount you spend.
 
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Philip Thomas
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slatersteven wrote:
Would this not all depends on what they spend it on?

You cannot work on a budget based solely on the amount you spend.


Well, channelling Margaret Thatcher for a moment here, the prudent housewife first works out how much money she has in her budget before she allocates it to individual items.

Of course, there are relevant political decisions to make about allocation (I tend to think the current allocation is more or less ok). But they can be taken within the context of an overall budget.
 
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Mac Mcleod
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slatersteven wrote:
Would this not all depends on what they spend it on?

You cannot work on a budget based solely on the amount you spend.


With the politics involved and the cost plus budgeting used, it's the only thing that actually works. It's equally fair and unfair to every one.

However, I've read repeatedly in the last month that the US spend as much ormore money than many other countries and gets worse out comes so it could be or cultural attitudes are more the problem. We tend to shoot for the'best' rather than the most pragmatic or best value. Perfect is the enemy of good enough.
 
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Boaty McBoatface
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All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.
 
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Philip Thomas
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slatersteven wrote:
All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.


Yes. This thread could equally be called "Government Revenue levels: Why change them?" and my position would not change. In fact, lets do that poll now.

Poll
Should we change the level of Government revenues (in your home country)?
No, keep them as they are.
Yes, but only enough to balance the budget
Yes, increase them
Yes, decrease them
      7 answers
Poll created by Philip Thomas
 
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Boaty McBoatface
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Philip Thomas wrote:
slatersteven wrote:
All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.


Yes. This thread could equally be called "Government Revenue levels: Why change them?" and my position would not change. In fact, lets do that poll now.

Poll
Should we change the level of Government revenues (in your home country)?
No, keep them as they are.
Yes, but only enough to balance the budget
Yes, increase them
Yes, decrease them
      7 answers
Poll created by Philip Thomas
Again the question is meaningless without an idea of what they intend to do with the money.

If the governemtn wants to build more hospitals I would support raising revenues to pay for it, if they want to start a war I would not.
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Philip Thomas
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slatersteven wrote:
Philip Thomas wrote:
slatersteven wrote:
All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.


Yes. This thread could equally be called "Government Revenue levels: Why change them?" and my position would not change. In fact, lets do that poll now.

Poll
Should we change the level of Government revenues (in your home country)?
No, keep them as they are.
Yes, but only enough to balance the budget
Yes, increase them
Yes, decrease them
      7 answers
Poll created by Philip Thomas
Again the question is meaningless without an idea of what they intend to do with the money.

If the governemtn wants to build more hospitals I would support raising revenues to pay for it, if they want to start a war I would not.


Assume (for the sake of the poll) that they would spend the increased revenue on balancing the budget and, that achieved, in equal proportion to existing spending. (Likewise for cuts- they would be taken in equal proportion from existing spending.

I totally agree that what they spend it on is relevant.

edit: Back on our original poll, decreasing spending is the most popular option, followed by adjusting spending to balance the budget, which, in almost every country, is also a vote to decrease spending...maybe Koldfoot was right.
 
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Boaty McBoatface
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Philip Thomas wrote:
slatersteven wrote:
Philip Thomas wrote:
slatersteven wrote:
All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.


Yes. This thread could equally be called "Government Revenue levels: Why change them?" and my position would not change. In fact, lets do that poll now.

Poll
Should we change the level of Government revenues (in your home country)?
No, keep them as they are.
Yes, but only enough to balance the budget
Yes, increase them
Yes, decrease them
      7 answers
Poll created by Philip Thomas
Again the question is meaningless without an idea of what they intend to do with the money.

If the governemtn wants to build more hospitals I would support raising revenues to pay for it, if they want to start a war I would not.


Assume (for the sake of the poll) that they would spend the increased revenue on balancing the budget and, that achieved, in equal proportion to existing spending. (Likewise for cuts- they would be taken in equal proportion from existing spending.

I totally agree that what they spend it on is relevant.

I know what you ask, I just am not sure it is relevant. I just do not consider a balanced budget that important, nor do I believe that increasing or deceasing revenues is that important. Properly targeted and managed resources are. £5 billion - Amount paid in benefits to those with an income in excess of £100,000. £4 billion - Losses to the taxpayer from RBS and the sale of Northern Rock. Are both examples of cuts that could be made, without altering government revenues.

Government revenues should keep pace with what the government needs to spend.
 
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Philip Thomas
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If you don't care about balancing the budget, then the answers are easy:
we should increase spending and cut taxes, stimulating the economy and pleasing the electorate at the same time. Inflation will take care of the debt mountain...
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Mac Mcleod
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slatersteven wrote:
Philip Thomas wrote:
slatersteven wrote:
Philip Thomas wrote:
slatersteven wrote:
All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.


Yes. This thread could equally be called "Government Revenue levels: Why change them?" and my position would not change. In fact, lets do that poll now.

Poll
Should we change the level of Government revenues (in your home country)?
No, keep them as they are.
Yes, but only enough to balance the budget
Yes, increase them
Yes, decrease them
      7 answers
Poll created by Philip Thomas
Again the question is meaningless without an idea of what they intend to do with the money.

If the governemtn wants to build more hospitals I would support raising revenues to pay for it, if they want to start a war I would not.


Assume (for the sake of the poll) that they would spend the increased revenue on balancing the budget and, that achieved, in equal proportion to existing spending. (Likewise for cuts- they would be taken in equal proportion from existing spending.

I totally agree that what they spend it on is relevant.

I know what you ask, I just am not sure it is relevant. I just do not consider a balanced budget that important, nor do I believe that increasing or deceasing revenues is that important. Properly targeted and managed resources are. £5 billion - Amount paid in benefits to those with an income in excess of £100,000. £4 billion - Losses to the taxpayer from RBS and the sale of Northern Rock. Are both examples of cuts that could be made, without altering government revenues.

Government revenues should keep pace with what the government needs to spend.


Doing that can destroy your economy and the value of your currency. Which would mean severely reduced benefits and wellbeing for everyone down the road. It feels good in the short term but you may be trading 4 years of happiness for 12 years of pain. Think about greenspan holding interest rates at 1% to prevent a recession and the way it lead to a really severe downturn (almost a second great depression).
 
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Boaty McBoatface
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Philip Thomas wrote:
If you don't care about balancing the budget, then the answers are easy:
we should increase spending and cut taxes, stimulating the economy and pleasing the electorate at the same time. Inflation will take care of the debt mountain...
Or we find a way to do it that does not harm the economy. It is not an if/or statement. There may be a way to balance the budget, whilst at the same time enjoining services (such as the elimination of real waste.

Moreover without knowing how savings will be made (or revenues increased) it's hard to judge if they are a good idea or not. Should we raise taxes on gambling? or make it illegal except through goverment run casinos? Could we hire out the army as mercenaries to any tin pot dictator who will pay for them, or raise taxes on arms exports?

Should we start a war to steal Saudi Arabia's oil?

How is more important then if.
 
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Boaty McBoatface
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maxo-texas wrote:
slatersteven wrote:
Philip Thomas wrote:
slatersteven wrote:
Philip Thomas wrote:
slatersteven wrote:
All true, the problem is that unlike a household a government is (in a sense) it's own boss. It gets to determine not only what it spends, but what it earns.

Then as you both say) the questions become political and social (not economic). It it not so much what a governemnt can afford to spend, as it is what can a society not afford to spend.


Yes. This thread could equally be called "Government Revenue levels: Why change them?" and my position would not change. In fact, lets do that poll now.

Poll
Should we change the level of Government revenues (in your home country)?
No, keep them as they are.
Yes, but only enough to balance the budget
Yes, increase them
Yes, decrease them
      7 answers
Poll created by Philip Thomas
Again the question is meaningless without an idea of what they intend to do with the money.

If the governemtn wants to build more hospitals I would support raising revenues to pay for it, if they want to start a war I would not.


Assume (for the sake of the poll) that they would spend the increased revenue on balancing the budget and, that achieved, in equal proportion to existing spending. (Likewise for cuts- they would be taken in equal proportion from existing spending.

I totally agree that what they spend it on is relevant.

I know what you ask, I just am not sure it is relevant. I just do not consider a balanced budget that important, nor do I believe that increasing or deceasing revenues is that important. Properly targeted and managed resources are. £5 billion - Amount paid in benefits to those with an income in excess of £100,000. £4 billion - Losses to the taxpayer from RBS and the sale of Northern Rock. Are both examples of cuts that could be made, without altering government revenues.

Government revenues should keep pace with what the government needs to spend.


Doing that can destroy your economy and the value of your currency. Which would mean severely reduced benefits and wellbeing for everyone down the road. It feels good in the short term but you may be trading 4 years of happiness for 12 years of pain. Think about greenspan holding interest rates at 1% to prevent a recession and the way it lead to a really severe downturn (almost a second great depression).
If a government is spending less then it needs to it's not doing it's job. It's jo0b is to make sure the country runs.
 
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Philip Thomas
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Yes, because when setting my household budget it is impossible for me to simultaneously think that it would be a good idea if I had more money and a bad idea if I robbed the nearest bank

That the revenue will not be raised in a grossly immoral manner was assumed by me to be obvious. Likewise, spending cuts will not be achieved by turning off life support machines in hospitals or letting everyone in prison wallk free!
 
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Boaty McBoatface
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Philip Thomas wrote:
Yes, because when setting my household budget it is impossible for me to simultaneously think that it would be a good idea if I had more money and a bad idea if I robbed the nearest bank :what:

That the revenue will not be raised in a grossly immoral manner was assumed by me to be obvious. Likewise, spending cuts will not be achieved by turning off life support machines in hospitals or letting everyone in prison wallk free!
Yes becasue no wars have ever been launched to steal a nations resources (even human ones) how silly of me.
 
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Philip Thomas
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slatersteven wrote:
Philip Thomas wrote:
Yes, because when setting my household budget it is impossible for me to simultaneously think that it would be a good idea if I had more money and a bad idea if I robbed the nearest bank

That the revenue will not be raised in a grossly immoral manner was assumed by me to be obvious. Likewise, spending cuts will not be achieved by turning off life support machines in hospitals or letting everyone in prison wallk free!
Yes becasue no wars have ever been launched to steal a nations resources (even human ones) how silly of me.


Very well, let me put it another way. I am a conservative. When I make a poll about one aspect of government policy, it is very unlikely to be a disguised poll suggesting a completely radical departure in a completely different area. Try not to overthink this.

 
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Boaty McBoatface
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Philip Thomas wrote:
slatersteven wrote:
Philip Thomas wrote:
Yes, because when setting my household budget it is impossible for me to simultaneously think that it would be a good idea if I had more money and a bad idea if I robbed the nearest bank :what:

That the revenue will not be raised in a grossly immoral manner was assumed by me to be obvious. Likewise, spending cuts will not be achieved by turning off life support machines in hospitals or letting everyone in prison wallk free!
Yes becasue no wars have ever been launched to steal a nations resources (even human ones) how silly of me.


Very well, let me put it another way. I am a conservative. When I make a poll about one aspect of government policy, it is very unlikely to be a disguised poll suggesting a completely radical departure in a completely different area. Try not to overthink this.

Forgive me, but this country, in the last decade, fought a war (that some have claimed) was about taking another countries assets, at huge expense. I would also point out that the party that went into the election promising to cut the deficit have done precisely the opposite (whilst making stringent cuts, and cutting taxes).
 
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Philip Thomas
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Fair enough. I (along with my party) opposed the war, but I guess we have to plead guilty to the stringent cuts and tax cuts.

One of the things that has got me thinking about the question of spending levels is the prospect of more spending cuts after the next election: the tories claim another £12.5bn needs to come from the welfare budget, but they also want to cut taxes at the same time. Labour wants to raise taxes but increase spending. I'm not sure what my party wants, but I think if we're serious about balancing the budget (ok, that excludes you, Mr Slater) we need to raise taxes and cut spending. Not that more cuts to the welfare budget would be my first choice, certainly not more cuts to those parts of the welfare budget already hit hard by the first round. About half the welfare budget is not only not being cut but being expanded at an above inflation rate...fairness would suggest we should stop that first. But I think savings could be made in the defence and foreign aid budgets as well.
 
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