Why big government reduces economic growth

The relationship between government spending and economic growth is quite well established, higher spending tends to mean lower growth.  A TPA study (PDF) found that Britain's GDP could be £12 billion higher if it weren't for the big increase in spending under the present Government.  Dan Mitchell, in a new video for the Centre for Freedom and Prosperity, gives eight key reasons why government spending reduces growth:




The relationship between government spending and economic growth is quite well established, higher spending tends to mean lower growth.  A TPA study (PDF) found that Britain's GDP could be £12 billion higher if it weren't for the big increase in spending under the present Government.  Dan Mitchell, in a new video for the Centre for Freedom and Prosperity, gives eight key reasons why government spending reduces growth: