Martin P Wilson

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Parliament Square London IC02001If more public spending is the only way to create growth then surely governments have become too large a part of the economy? Government is about spending and has little to do with creating wealth.

The best government can do is move wealth from individuals and business to those who serve government.

The result is wealth is moved away from the wider economy and into a closed community of public sector consumers and suppliers. It takes money away from the real wealth generators, small businesses, most manufacturers, exporters and out of the pockets of individuals who spend money in their local communities.

So real public sector cuts, rather than slowed growth, would free governments to reduce their overall tax take. If those tax cuts were targeted at the low paid the money would go into the real economy; even with a bit more cash such low-earners would still have little discretionary income. They would have to spend the money to maintain their lifestyle in times of depressed wages and increasing prices.

Money only works when it circulates.

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