3 ms·

Those numbers are not directly comparable. GDP is a measure of added value, not spending. Public sector spending may be ~50% of the GDP, but private sector spen

Those numbers are not directly comparable. GDP is a measure of added value, not spending. Public sector spending may be ~50% of the GDP, but private sector spending is something like ~200%, making public sector ~20% of the total.

hartator 2y ago
Interesting. I always think private spending is GDP - public spending. Can you share where you get this numbers?
- jltsiren 2y ago
  Total spending is not something that gets reported very often. I've seen the numbers for Finland but not for other countries. In the US, consumer spending seems to be ~70% of GDP, but I can't find any numbers for business spending.
Aerroon 2y ago
Why wouldn't they be comparable? It's a measure of how much government taxes take out of 'your' paycheck - tax receipts don't tell the whole story, because they don't show inflation caused by money printing. Government spending does. It effectively indicates that you're working for the manor lord Monday and Tuesday (and Wednesday in France), and are allowed to work on your own field from Wednesday to Friday. At the extreme it is obvious that this would discourage work and starting businesses. If the government took 100% it wouldn't make sense to do anything (legally). Therefore the question is: at what percentage does this start happening too much? This is an important question, because government budget as a percentage of GDP has been increasing over the last century. At the start of the 20th century this percentage was around 3-5%. Today it's around 40-60%. And it seems to be increasing even today. People don't like austerity, but if our current system is built on an ever-increasing share of government spending of the economy, then eventually we're going to be hit with austerity x10.
- jltsiren 2y ago
  They are not comparable, because the whole economy is ~250% of GDP when you measure it by spending. The government spends ~50% of GDP. Households spend ~70%. And businesses spend >100%. You should either compare government spending to total spending or the part of GDP produced by the government to total GDP. Either way, the government is ~20% of the economy.

hartator 2y ago

Interesting. I always think private spending is GDP - public spending. Can you share where you get this numbers?

jltsiren 2y ago
Total spending is not something that gets reported very often. I've seen the numbers for Finland but not for other countries. In the US, consumer spending seems to be ~70% of GDP, but I can't find any numbers for business spending.

Aerroon 2y ago

Why wouldn't they be comparable? It's a measure of how much government taxes take out of 'your' paycheck - tax receipts don't tell the whole story, because they don't show inflation caused by money printing. Government spending does. It effectively indicates that you're working for the manor lord Monday and Tuesday (and Wednesday in France), and are allowed to work on your own field from Wednesday to Friday. At the extreme it is obvious that this would discourage work and starting businesses. If the government took 100% it wouldn't make sense to do anything (legally). Therefore the question is: at what percentage does this start happening too much? This is an important question, because government budget as a percentage of GDP has been increasing over the last century. At the start of the 20th century this percentage was around 3-5%. Today it's around 40-60%. And it seems to be increasing even today. People don't like austerity, but if our current system is built on an ever-increasing share of government spending of the economy, then eventually we're going to be hit with austerity x10.

jltsiren 2y ago
They are not comparable, because the whole economy is ~250% of GDP when you measure it by spending. The government spends ~50% of GDP. Households spend ~70%. And businesses spend >100%. You should either compare government spending to total spending or the part of GDP produced by the government to total GDP. Either way, the government is ~20% of the economy.