Norman
Diamond Member
- Sep 24, 2010
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First of all, Europe is NOT socialist. The government spending on average is about 9% higher here than in USA. (41% vs 49.1%). Europe like USA is a mixed economy.
Second of all, I do think it's pretty well demonstrated that freer economies have a tendency to do better everything else being equal.
Besides that you can't simply compare "more or less government", you have to consider the form as well. For example in USA the government is incentivize everyone to spend and burrow, which is detrimental to long term growth. Somewhere else like China this maybe the opposite. Some governments distort the economy more some less. So it's not just the government size it's how it's run as well. Besides that this government is only a part in itself.
Governments are not constant anyway, in USA the government was way less than 10% in early 1900s, now it is 40%. I don't have similar numbers for Europe but I believe the governments used to be smaller as well as all the social security style programs were initiated later. At least Europeans were wise enough to not enact 100% ponzi style funded social security systems. Those will truly be the demise of USA.
And now for a comparison you can look at USA at 1900s and 2000s. Biggest debtor (>10% government) vs. biggest debtor (40% government). So yeah, not good. I believe the problem is democracy. In small homogenous european nations it's easier for voters to vote for what's best in the country. iIn USA it makes more sense to vote in ones self interest, which has caused this big spend and burrow mentality. Democracy unlike markets can not function if everyone votes in their self interest. But this is just my theory for why US FED government performs so much worse and above all short sightedly than most governments.
Someone brought up Switzerland here, which is actually more capitalist country than USA at 34% (7% difference) government spending. Europe has quite a big deviation.
Second of all, I do think it's pretty well demonstrated that freer economies have a tendency to do better everything else being equal.
Besides that you can't simply compare "more or less government", you have to consider the form as well. For example in USA the government is incentivize everyone to spend and burrow, which is detrimental to long term growth. Somewhere else like China this maybe the opposite. Some governments distort the economy more some less. So it's not just the government size it's how it's run as well. Besides that this government is only a part in itself.
Governments are not constant anyway, in USA the government was way less than 10% in early 1900s, now it is 40%. I don't have similar numbers for Europe but I believe the governments used to be smaller as well as all the social security style programs were initiated later. At least Europeans were wise enough to not enact 100% ponzi style funded social security systems. Those will truly be the demise of USA.
And now for a comparison you can look at USA at 1900s and 2000s. Biggest debtor (>10% government) vs. biggest debtor (40% government). So yeah, not good. I believe the problem is democracy. In small homogenous european nations it's easier for voters to vote for what's best in the country. iIn USA it makes more sense to vote in ones self interest, which has caused this big spend and burrow mentality. Democracy unlike markets can not function if everyone votes in their self interest. But this is just my theory for why US FED government performs so much worse and above all short sightedly than most governments.
Someone brought up Switzerland here, which is actually more capitalist country than USA at 34% (7% difference) government spending. Europe has quite a big deviation.
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