Human development and the optimal size of government

Journal of Socioeconomics ^ | 2009 | Dr. Antolin Davies

[FromTheSidelines]

...

The results indicate that, over all countries, the estimated levels of government consumption and investment expenditures that are associated with maximal growth in per-capita RGDP are 8.5% and 6.2%, respectively. This implies an optimal level of government expenditures of 14.7%.

[FromTheSidelines]

VERY interesting study, it is pretty rigorous in its approach, and the conclusion is surprising - it's considerably LESS than what most people have determined, but still non-zero (just under 15%), as a means to optimize real GDP.

[FromTheSidelines]

Also interesting to note: the optimal level of Government spending is about HALF of what the present Administration is spending - 14.7% versus 28% of GDP. Cut our spending down to $1.9 trillion would result in optimal growth of our economy - and would have the side-benefit of yielding a $400 billion SURPLUS to start attacking the national debt!