Government, social spending and debt

A simple cross sectional plot of recent data on debt and social expenditures as a % of GDP for OECD countries suggests some positive correlation. Two caveats are in order. First, if you look at total government expenditures what you find is in fact a negative correlation. Second, the optimal size of a welfare state or government is not determined by whether it has a large deficit.

2 thoughts on “Government, social spending and debt

Comments are closed.