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How governments expand

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SYDNEY — This will be one of the topics at the 7th Australian Libertarian Society (ALS) Friedman Liberty Conference + World Taxpayers Association (WTA) Conference from May 23-26 in this city. The event is mainly sponsored by the Australia Taxpayers Alliance and co-sponsored by other free market institutes like the Property Rights Alliance (PRA, USA).

On Days 3 and 4, May 25-26, there will be four simultaneous panel discussions to accommodate many topics and speakers from many countries. I will be one of the four speakers in the panel on “Growth of Government” on Day 3 and I want to explore sub-topics like (1) Are all governments expanding endlessly? (2) If Yes, how fast and if No, since when? And (3) Are government debts rising endlessly?

To help me answer these and related questions, I checked some data from the IMF’s World Economic Outlook (WEO) database. The numbers show that for question #1, the answer is No. Of the 19 countries selected, those with (a) rising government spending as share of GDP are France, UK, Australia, US. In Asia, the socialist economies of China and Vietnam, India, and S. Korea. Those with (b) declining percentages are Germany, Canada, New Zealand; in Asia are Japan, Thailand, Taiwan and Singapore. The rest have fluctuating percentages, like the Philippines.

With this mixed result, I checked another set of numbers, government debt as share of GDP. The numbers here refer only to actual debt and do not include contingent debt and liabilities. With a few exceptions — like Germany, New Zealand, Hong Kong, Indonesia, Philippines and Thailand — all other governments have rising public debts. Meaning their governments keep expanding somehow.

The outstanding numbers here are those of Hong Kong with near-zero debt, and Indonesia which drastically cut their debt by one third in the last decade. The Philippines’ big decline in debt/GDP ratio was registered in the previous administration. By 2017 and 2018, the decline has stopped as the Duterte administration was borrowing big time to finance lots of freebies and expanded welfare programs like free tuition in all state universities, free irrigation, free PhilHealth for many sectors and expanded conditional cash transfer (CCT).

Governments expand by creating various types of alarmism and the public is convinced that more government, more taxes are the answer. Like ‘oil crisis’, ‘food crisis’, ‘climate crisis’, ‘inequality crisis’ — so more government interventions like oil subsidy, food subsidy, expanding climate bureaucracies and junkets, or oil tax hikes to fund new welfarism with no timetable (TRAIN law in the Philippines).

It is a slippery slope, one welfarism leads to another; one tax hike leads to another; one new bureaucracy created leads to another.

Most if not all of those ‘crisis’ and alarmism are false and government-invented. More facts-based research and assertion of more individual liberty, more personal and civil society responsibility, will help counter this trend.

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Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

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