I've lived in 6 countries and think everyone should spend time abroad.
However, I don't buy this specific premise.
- Low government spending can just as much lead to stagnation, poor infrastructure, poor healthcare and education.
- It's a global statement, but there are huge local variations that can make a big difference to economic environment. Living in a big city with a deep ecosystem around a specific sector will have a much bigger impact than what the government does nationally.
- You have options besides moving to another country. For instance investing in education that leads to better outcomes.
Moving to another country can have big economic effects, it's just not "the only true leverage you have".
investing in education has barely an effect on economic growth. to give you an example
working as average cashier in switzerland is better economically than being average engineering manager in France
I have seen many economists argue that austerity is the first sign of a country down turning, funnily enough these are usually also the same people that advocate for smaller government to allow the "free market" to do its thing. Try squaring that circle.
But your proposition while intuitive and seems reasonable does seem a little reductionist. Many look for a single variable that can explain their predicament but that can crush away any nuance that may also be useful. Just because government spending can be high doesn't mean it will necessarily benefit you if you move there, it isn't always spread equally or at least somewhat fairly.
> I have seen many economists argue that austerity is the first sign of a country down turning, funnily enough these are usually also the same people that advocate for smaller government to allow the "free market" to do its thing. Try squaring that circle.
The small government types prioritize low taxes (especially on capital and business), they aren’t particularly concerned about spending except to the extent necessary politically to attain low taxes.
Austerity typically features cuts in spending without cuts in taxes—and often with hikes in taxes—to balance government cash flows. They aren’t the same thing at all. The only thing wrong about calling it “the first sign of a down turn” is that austerity is pretty invariably resorted to very late in a down turn after everything else has failed and government credit has either seen drastically worse terms or completely dried up. Heck, often it is imposed by institutions like the IMF as a condition for a bailout, which is very much a very late in a downturn recourse.
> high economic growth is largely caused by low government spending
how? if theres any negative effect its down to higher tax rates so you cant say its directly caused by higher spending.
china has seen incredible growth because their government decided to give out loans with extremely low interest to anyone working in a strategic industry like open weight ai today, electric cars 5 years ago or batteries and phones before that. you can argue that loans are not spending because they get paid back, but its still heavy state involvement going against orthodox neoliberal thought.
imo what matters is not the amount of spending but how its used. a smart country will use it to invest in domestic industry and create state owned companies (that will return a small profit to the budget and force down prices with competition), or give it away to citizens and raise their quality of life. stupid countries like america give all their money to military contractors and for profit hospitals because the market is sacred and cant be touched.
and im not sure gdp growth affects your personal economic situation that much. what matters is wages, cost of living and buying power of the currency you get paid in. if you feel like you dont get paid enough try switching jobs first before you switch countries, i know its hard today but not harder than moving to a brand new place out of political conviction.
Did you ask an ai to critique? Gemini have some points that weren't addressed in the post (which I barely skimmed), here's the summary of summary of summary:
Omitted Variable Bias: Conflates development stage with state size. Developing nations have small governments and high catch-up growth; mature economies have large safety nets and slower frontier growth.
Bad Extrapolation: The power-law model predicts ~36% growth at 0% spending. In reality, 0% spending means a failed state with no property rights or rule of law.
Lacks Basic Controls: Ignores panel fixed effects, reverse causality (Wagner's Law), and bundles productive infrastructure with welfare transfers.
I've lived in 6 countries and think everyone should spend time abroad.
However, I don't buy this specific premise.
- Low government spending can just as much lead to stagnation, poor infrastructure, poor healthcare and education.
- It's a global statement, but there are huge local variations that can make a big difference to economic environment. Living in a big city with a deep ecosystem around a specific sector will have a much bigger impact than what the government does nationally.
- You have options besides moving to another country. For instance investing in education that leads to better outcomes.
Moving to another country can have big economic effects, it's just not "the only true leverage you have".
investing in education has barely an effect on economic growth. to give you an example working as average cashier in switzerland is better economically than being average engineering manager in France
> investing in education has barely an effect on economic growth
Can you provide some evidence for this statement?
Like, imagine a country where 50% of the population was illiterate. Would one expect to see lots of white collar workers in this country?
I have seen many economists argue that austerity is the first sign of a country down turning, funnily enough these are usually also the same people that advocate for smaller government to allow the "free market" to do its thing. Try squaring that circle.
But your proposition while intuitive and seems reasonable does seem a little reductionist. Many look for a single variable that can explain their predicament but that can crush away any nuance that may also be useful. Just because government spending can be high doesn't mean it will necessarily benefit you if you move there, it isn't always spread equally or at least somewhat fairly.
> I have seen many economists argue that austerity is the first sign of a country down turning, funnily enough these are usually also the same people that advocate for smaller government to allow the "free market" to do its thing. Try squaring that circle.
The small government types prioritize low taxes (especially on capital and business), they aren’t particularly concerned about spending except to the extent necessary politically to attain low taxes.
Austerity typically features cuts in spending without cuts in taxes—and often with hikes in taxes—to balance government cash flows. They aren’t the same thing at all. The only thing wrong about calling it “the first sign of a down turn” is that austerity is pretty invariably resorted to very late in a down turn after everything else has failed and government credit has either seen drastically worse terms or completely dried up. Heck, often it is imposed by institutions like the IMF as a condition for a bailout, which is very much a very late in a downturn recourse.
> high economic growth is largely caused by low government spending
how? if theres any negative effect its down to higher tax rates so you cant say its directly caused by higher spending.
china has seen incredible growth because their government decided to give out loans with extremely low interest to anyone working in a strategic industry like open weight ai today, electric cars 5 years ago or batteries and phones before that. you can argue that loans are not spending because they get paid back, but its still heavy state involvement going against orthodox neoliberal thought.
imo what matters is not the amount of spending but how its used. a smart country will use it to invest in domestic industry and create state owned companies (that will return a small profit to the budget and force down prices with competition), or give it away to citizens and raise their quality of life. stupid countries like america give all their money to military contractors and for profit hospitals because the market is sacred and cant be touched.
and im not sure gdp growth affects your personal economic situation that much. what matters is wages, cost of living and buying power of the currency you get paid in. if you feel like you dont get paid enough try switching jobs first before you switch countries, i know its hard today but not harder than moving to a brand new place out of political conviction.
it's a long read https://julienreszka.github.io/economic-simulator/armey-curv...
> high economic growth is largely caused by low government spending
not true...anybody with such simplistic economic opinions should really just do an 101 on economics
leaving your country? to go where? and once your there, what are you gonna do?
it’s true tho. https://julienreszka.github.io/economic-simulator/armey-curv...
As evidence you refer to your own site?
Stuff like this is why I always read to the bottom of the comments.
People on HN are really something.
so? it’s open source you can reproduce the research findings. i did the research so don’t claim i don’t know the subject
Did you ask an ai to critique? Gemini have some points that weren't addressed in the post (which I barely skimmed), here's the summary of summary of summary:
Omitted Variable Bias: Conflates development stage with state size. Developing nations have small governments and high catch-up growth; mature economies have large safety nets and slower frontier growth.
Bad Extrapolation: The power-law model predicts ~36% growth at 0% spending. In reality, 0% spending means a failed state with no property rights or rule of law.
Lacks Basic Controls: Ignores panel fixed effects, reverse causality (Wagner's Law), and bundles productive infrastructure with welfare transfers.
it’s addressed in the artixle but probably gemini has not large enough context windown the article is pretty long (30min read)
[dead]
Where are you going?
And which country are you leaving?
[dead]