-->

Type something and hit enter

On

Is the government meddling more or less?

To spot whether the state is meddling more, or less

1.  Look first at trends in government spending as a share of GDP.

2.  Then check whether the spending is going to productive investment or to give-aways.

3.  Finally, look at whether the government is using state companies and banks as tools

  • to pump up growth and contain inflation, and 
  • whether it is choking or encouraging private businesses.



In certain environment, less meddling is best

In recent years, many countries have been 

  • raising the government share of the economy, 
  • steering bank loans to big state companies, 
  • subsidising cheap gas for the privilege classes and 
  • enforcing insensible rules in an unpredictable way.

Even low income countries like India are rolling out full-service welfare systems, a luxury that the Asian miracle economies began to adopt only much later in their development.  At that point, countries like South Korea and Taiwan had already invested heavily in factories and transport networks, and they could well afford inclusive pension and health programs.

In contrast, many states are now managing the economy in ways that effectively retard growth, thereby 

  • fueling disrespect for establishment politicians, and 
  • the rise of radical populists.  
In an environment like this, especially, less meddling is best.

http://myinvestingnotes.blogspot.com/2020/12/to-spot-whether-government-is-meddling.html

Click to comment
Back to Top
Back to Top