Consequences of government spending from "summary" of Economic Facts and Fallacies by Thomas Sowell
Government spending has consequences that go beyond the immediate benefits or services that are provided. One of the key consequences is the impact on the economy as a whole. When the government spends money, it does so by either taxing individuals or borrowing money. In either case, this leads to a reduction in the amount of money available for private investment and consumption, which can have a negative effect on economic growth. Another consequence of government spending is the potential for inefficiency and waste. Government agencies are not subject to the same competitive pressures as private firms, which can lead to a lack of incentive to operate efficiently. This can result in resources being allocated in a subopt...
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