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educational blogs |
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Earlier this afternoon I was reading a copy of Investors Chronicle from a few Weeks ago (as always I am way out of date on my reading !!) and there was a couple of pages on a Regular Feature that Chris Dillow writes regarding several different Investment Strategies and how they work over time (Editor’s note - this Blog was first written in draft form back in mid 2018).
I reckon I might have done a Blog around this before or at least I have probably referred to what Chris does in this Strategy Piece and I guess that is one of the catches of having written various Blogs for nearly 4 Years now - I totally forget what I have written about and what I haven’t !!
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This is the last part of this Blog Series and you can read the earlier bits at these Links:
http://wheeliedealer.weebly.com/educational-blogs/the-spectrum-of-how-to-organise-a-nations-economy-part-1-of-3 http://wheeliedealer.weebly.com/educational-blogs/the-spectrum-of-how-to-organise-a-nations-economy-part-2-of-4 http://wheeliedealer.weebly.com/educational-blogs/the-spectrum-of-how-to-organise-a-nations-economy-part-3-of-4 The Counterpart to High State Spending - High Borrowing Invariably whenever a Socialist Government embarks on a high level of State Spending, it has to fund that Spending and it is usually too difficult within the Political constraints of Western Economies to tax People and Businesses within the Economy at a level that would cover all the Spending (and to be fair that would make little sense anyway because a CONTROLLED amount of State Borrowing can be worth doing and affordable provided that the Economy is growing at a sufficient rate), and as a result the Government has to borrow money by issuing Bonds.
So how do various Governments shape-up on their Levels of Spending?
As with all the Pictures here I have created them using Microsoft Paint and I find it unbelievably difficult to use and I suspect much of this is because in a former life I did all such Image creation using Microsoft Powerpoint which I found superb and very intuitive. Paint could most definitely never be called ‘intuitive’ !!
If you click on the picture it should grow bigger to help you see the detail.
More implications of the Different Levels of State Spending
Communism When the level of State Spending gets to very high proportions of a Nation’s GDP, there can initially be some benefits and in fact, back in the early 1920s when Communism in the USSR got started, the Economic Figures coming out were far superior to other Countries for a period of time (of course, that is assuming that the Figures were correct - it was very much a huge part of the Propaganda of the Commies to exaggerate how successful they were when in fact that was far from the truth). This initial boost comes because State organisation of various Industries (in the USSR they grouped Production into particular geographical regions - for example Shoe making would be done in one particular Town or whatever and Kitchen Utensils would be made in another Town) and the simple fact of concentrating production in this way was highly efficient for a while, through efficiencies from factors like labour specialism (Division of Labour), centralised purchasing and ease of logistics, etc. |
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