Maximizing economic growth through limiting size of government



At a certain point government spending becomes a drag on the economy. Studies show that this begins to happen when spending exceeds 17.4% of GDP. I think it is the same principal as the law of diminishing returns in setting the price of a product or service. At some point when you raise the price of a product the total revenue starts declining because fewer people are buying. The Laffer curve makes the same point about the rate of taxes. At some point the higher the rate the less taxes will be collected.

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