Argument: Reducing the size of government and, therefore, the amount it takes in tax frees up money which consumers can spend on goods or for companies to expand: Both create jobs

Government costs money. That’s an indisputable fact. So that raises the question of whether that’s the best way of spending it. It is clear that money could be spent in other ways and so if this is the choice there is an opportunity cost in that decision as there is in any other.

There is compelling evidence that reducing the government’s take of total GDP stimulates the economy through freeing up funds to create jobs especially in manufacturing.

There is compelling evidence [i] that reducing the tax burden and unleashing the dynamism of the market by cutting regulation has a far greater effect than government massaging unemployment figures by expanding its own employment base. Indeed it also appears to be the case that the relatively high level of government salaries in fact just puts greater pressure on employers in the private sector to compete the resulting wage inflation has a dampening effect on the economy as a whole at a time when it can least afford it.

It’s further worth noting that jobs created during a recession tend to morph into permanent positions thereby building in an ever-continuing expansion in the size of the state unless it is periodically and deliberately culled.

Conversely the investment directly into the private sector creates wealth producing jobs that are paid at a level that is sustainable and is responsive to the health of the wider economy.

[i] Alesina, Ardagna, Perotti, Schiantarelli. “Fiscal Policy, Profits and Investments”. National Bureau of Economic Research. 1999

Candidate 1: "No country can pay its bills or increase the prosperity of its citizens if it is wasting money on unnecessary programmes. The principle problem with government funding is that it is not addressing any of the problems that Proposition raises. In many countries, The ideology of state intervention is has made government ever larger, building ever more excessive and bloated bureaucratic empires with fiefdoms and sinecures for every busybody and apparatchik more interested in monitoring change than making it, and more concerned with process than people.

It is not uncommon – indeed it is not even unusual - for private sector organisations to shed ten percent of their workforce when the judge themselves to have become uncompetitive, unprofitable or administratively unwieldy. Both the governments of France and Canada have done that in recent years and yet maintain high standards of government support [i] .

For average public sector wages to be out stripping those of the private sector (who ultimately pay them) is ridiculous. It becomes more worrying when preferential health and pension plans – where the public sector outstrips the private by nearly four to one are taken into account [ii] .

There is no question that it would be great if everybody could earn more, have more lucrative and more secure pensions, the world would be a nicer place. However, to penalise those who are making the money to subsidise those who aren’t simply makes no sense.

Typically a government’s solution to an issue like child poverty is to establish a commission to discuss it – when it reports several years later it informs the waiting nation who paid for it that the solution might well be if their parents had a job. Most people could have figured this out in two minutes and at no cost [iii] .

[i] "Big government: Stop!" The Economist. January 21st, 2010

[ii] Dan Arnall. ABC News. Working in America: Public vs. Private Sector. 18 February 2011.

[iii] Michael Cloud. “Why Not Big Government. Five Iron Laws.” The Centre for Small Government."
Candidate 2: "Were the theory put forward true, and that is debatable, it would require tax cuts to benefit the lowest paid individuals and the smallest companies. However the political reality is that it never does. Poor people and small companies do indeed spend money which has a stimulating effect on the economy, but spending only stimulates the economy if it is spent in the right way. It is not possible to guarantee that the funds that flow into a state’s economy as a result of tax cuts will benefit that economy exclusively. Most forms of good and commodity now exist within a global market; manufacturing and production have become concentrated within states such as China. Useful and productive business activity will always require that a proportion of a business’s funds be spent overseas.

The advantage of government funding is that it can be directed into the weakest areas of the domestic economy, with a degree of dynamism and control that the markets will never be able to achieve. However, recent history has suggested that tax cuts have tended to be directed to the wealthy and to large corporations who are under no obligation to spend or invest either domestically or immediately.

There is little benefit to any economy in allowing wealthy individual and organizations to further expand stagnant wealth or to invest in high end products bought internationally.

There is also a matter of scale, government has a capacity for borrowing against its own security of wealth that is simply not matched by any private individual or corporation. Equally government is uniquely placed to undertake infrastructural investment such as house building projects which directly supports sectors that are otherwise the hardest hit during times or economic downturn.

Even where tax cuts are directed or fall evenly across all income ranges there is still no control over the areas of probable expenditure and are also unlikely to stimulate sectors such as construction.

Most importantly tax cuts have no direct benefit for the unemployed which, of course, the creation of jobs by government itself does."
Candidate 3: "The primary difficulty with governments retaining surpluses is that the government has no proprietary right to the funds in its coffers. The taxpayer effectively subsidizes the government, on the understanding that it will undertake functions necessary for the defence, continued operation and normative improvement of the state and society.

Clearly defense has to be one of the core functions of government and there are a few others, such as maintaining law and order. For government to say that the only way of securing its own finances is running a small surplus in its current account budget is palpably not true when there is astonishing waste in government expenditure, which is in turn already bloated and intervenes into areas of public life where it simply does not belong.

In terms of using government expenditure as a tool to respond to recessions, there may well be a role in terms of how government uses its own purchasing power and it makes sense that should be used for domestic purchasing wherever possible, however there is little to be gained by government creating imaginary jobs undertaking roles that simply don’t produce anything.

Instead the most useful role that government can play during a recession is not expanding its own size and, therefore, the final cost to the taxpayer, but reducing it. Cutting the size of government reduces the tax burden on business and individuals and cuts back on regulatory pressure. Both actions free up money for expenditure which creates real jobs in the real economy, producing real wealth, in turn spent on real products, which in turn create jobs. This beneficial cycle is the basis of economics, creating imaginary jobs simply takes skills out of the real economy and reduces the pressure on individuals to take jobs that they might not see as ideal.

The most sensible response to a government surplus is not to hoard it on the basis that it might come in useful at some undefined point in the future but to give it back to the people who earned it in the first place. Doing so means that it is spent in the real economy, creating real wealth and real jobs and thereby avoiding the prospect of recession in the first place.

Ultimately it comes down to a simple divide as to whether you believe governments or people are better at spending money. The evidence of waste and incompetence in government expenditure is compelling and it seems an absurd solution to governments mismanaging the money they already have to give them more."
Candidate 4: "This again is a myth routinely put forward by the right. Governments already distinguish between regulations that should apply to all companies and those, more onerous ones, that apply to larger companies only. There are certain standards in terms of health and safety of foodstuffs, products and so forth. However, there is clearly a different role when it comes to regulating larger companies such as banks, insurance companies and major employers.

There are particular sectors that require more regulation than others but the bulk of regulation is there to protect both staff and customers and it is part of the reality of doing business.

The idea that regulation harms small business is simply absurd as they benefit from the regulation of larger businesses who may be either their suppliers or customers are also regulated.

Equally start-up companies benefit from the fact that regulation evens up the playing field with more established competitors. If nobody is allowed to cut corners or perform other mildly criminal acts it is clearly an advantage to the new starters."
Candidate 5: "The myth of the greater efficiency in the private sector is one of the enduring fallacies of the politics of the right. Even the slightest glance at those areas where governments routinely outsource capital projects- defense procurement, major infrastructural projects and IT projects- there is astonishing inefficiency and it seems questionable as to how the public sector could be any less efficient.

It is an innate aspect of private companies that they need to make a profit, which is by nature an inefficiency, in that it takes resources out of any system. It is a strange thing that those who most passionately support the efficiency and effectiveness of the private sector become meek when it comes to the most important elements of public life- defense of the nation, policing the streets, educating the young. Equally when the astonishing levels of inefficiency and, frequently, incompetence that exist within the private sector come to light in the collapse of companies, be those banks or auto-giants, apparently it becomes fine for state to intervene to pick up the pieces and put things back together again.

It is equally wrong to suggest that the lack of culpability of senior managers has an impact on efficiency: the ultimate senior manager of a public service is a minister- either elected or appointed by someone who is- and is therefore accountable at the ballot box for the services provided. By contrast senior managers, in the shape of boards of directors, in the private sector seem relaxed about paying themselves huge salaries and bonuses even when their companies are running huge losses and shedding jobs: this scarcely suggests a high level of personal responsibility for success or failure."
Candidate 6: "There is the world of difference between establishing basic rights and interfering in matters that are best agreed at a community or state level. That is the reason why the states collectively agree to constitutional amendments that can be considered to affect all citizens.

However, different communities regulate themselves in different ways depending on both practical needs and the principles they consider to be important. Having the opinions of city-dwellers, who have never got closer to rural life than a nineteenth landscape in a gallery instruct farming communities that they cannot work the land to save a rare frog is absurd.

Trying to establish policies such as a minimum wage or the details of environmental protection at a federal level simply makes no sense, as the implications of these things vary wildly between different areas of the country.

Equally local attitudes towards issues such as religion, marriage, sexuality, pornography and other issues of personal conscience differ between communities and the federal government has no more business banning prayer in Tennessee than it would have mandating it in New York. These are matters for the states and sometimes for individual communities.

The nation was founded on the principle that individual states should agree, where possible, on matters of great import but are otherwise free to go their separate ways.

In addition to which, pretending that the hands of politicians and bureaucrats are free of blood in any of these matters is simply untrue – more than untrue, it is absurd.

If the markets are driven by profit- a gross generalisation - then politics is driven by the hunger for power and the campaign funds that deliver it. Business at least has the good grace to earn, and risk, its own money whereas government feels free to use other peoples for whatever is likely to buy the most votes. Likewise business makes its money by providing products and services that people need or want. Government, by contrast, uses other people’s money to enforce decisions regardless of whether they are wanted or needed by anyone.

Ultimately it is the initiative and industry of working Americans that has provided the funds for the great wars against oppression as well as the ingenuity to solve environmental and other technical solutions to the problems faced by humankind.

Pharmaceutical companies produce medicines – not the DHHS; engineering companies produce clean energy solutions – not the EPA; farmers put food on families’ tables – not the Department of Agriculture."

Were the theory put forward true, and that is debatable, it would require tax cuts to benefit the lowest paid individuals and the smallest companies. However the political reality is that it never does. Poor people and small companies do indeed spend money which has a stimulating effect on the economy, but spending only stimulates the economy if it is spent in the right way. It is not possible to guarantee that the funds that flow into a state’s economy as a result of tax cuts will benefit that economy exclusively. Most forms of good and commodity now exist within a global market; manufacturing and production have become concentrated within states such as China. Useful and productive business activity will always require that a proportion of a business’s funds be spent overseas.

The advantage of government funding is that it can be directed into the weakest areas of the domestic economy, with a degree of dynamism and control that the markets will never be able to achieve. However, recent history has suggested that tax cuts have tended to be directed to the wealthy and to large corporations who are under no obligation to spend or invest either domestically or immediately.

There is little benefit to any economy in allowing wealthy individual and organizations to further expand stagnant wealth or to invest in high end products bought internationally.

There is also a matter of scale, government has a capacity for borrowing against its own security of wealth that is simply not matched by any private individual or corporation. Equally government is uniquely placed to undertake infrastructural investment such as house building projects which directly supports sectors that are otherwise the hardest hit during times or economic downturn.

Even where tax cuts are directed or fall evenly across all income ranges there is still no control over the areas of probable expenditure and are also unlikely to stimulate sectors such as construction.

Most importantly tax cuts have no direct benefit for the unemployed which, of course, the creation of jobs by government itself does.
