Government Spending On Economic Performance Essay

Abstract Government spending and its influences on economic growth is a hotly debated issues among professionals. Policymakers are divided between whether an economy can expand or is stripped of its potential to grow as government spending increase. Spending on for example infrastructure and defense are constructive, many economists question that public spending has decreasing marginal benefits and lead to crowding out of the the private sector. Supporters of larger government spending claim that government programs offer valuable public goods such as education and infrastructure which would not work efficiently if they were privately owned. Furthermore, an argument advocates use is that in government spending can boost economic growth by putting money into people s pockets. Proponents of smaller government have the opposite view. They argue that governments which are too big destabilize economic growth by not allocating resources to the most efficient user and take away from the productive s ector of the economy to government. This paper evaluates the influence of government spending on economic performance. It examines the theoretical arguments, reviews evidence and highlights the latest academic research. Introduction Vienna, the capital of Austria has been named world s top city for quality of life for six consecutive years. The consulting firm Mercer conducts a yearly survey to help firms and organizations determine a reasonable payment and hardship allowances forShow MoreRelatedGovernment Spending On Healthcare And Education860 Words   |  4 PagesGovernment Spending in Healthcare and Education The benefits of Government Spending have picked its blossomed fruits of labor within the economy, people and the nation as a whole. 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