Johnny suggests that a bigger government always brings more benefit to society as the government may use taxes received to provide more services to the public. Comment on Johnny's argument and explain your opinion.
Can anyone give comment and explain in detail in English?
- garlic2010Lv 71 decade agoFavorite Answer
Johnny's argument is wrong. Why must those services be provided by the government. If the services are required, private sector will step in and provide the services, always at at lower cost and with better quality.
A bigger government means more public expenditure and higher taxation.It is a transfer of income from the private sector to the public sector. By providing services at lower cost to some sectors of society,the government is redistributing the income from one sector to another.But how does the government know that such income redistribution is in the best interest of society? How can the government ensure such income distribution is economically efficient? The answer is there is NO way the government knows that the allocation of resources is efficient because there is no price signal to indicate what people want. The government can only guess, or do something that is politically correct,but very often such policies are against economical principles. Political consideration is always the highest priority in government decisions, which more often than not, are not economically sound.
Public services are known for their inefficiency, waste of resources and red-tape. Public services can be provided by private sectors which are motivated by profits and the price signals. Private sector can produce the same services efficiently.
The last thing big government supporters will ask is how about the poor people, who will help them etc. The fact is without aid from government the poor people will get out of poverty faster than with such aid. I would have donated more to voluntary organizations if I had been taxed less by the government.
The key phrase is let the private sector decide.