Does larger government always equal government involvement in the economy?

[Near]

Because Australia offers universal health-care, and a vast array of other social services...

but, it has one of the most laissez-faire freemarkets in the world.

Ireland too, which has crazy low tax rates for businesses.

[Pha King Liberals]

yes

[Erick]

Australia right there is dabbling in the economy...

[as.erwin]

Not at all.
Bush expanded the government quite a bit without intruding into the lives of private citizens!

[mooyang]

You're right - it doesn't. Big government can encompass a wide range of services from defense to healthcare to education. Australia & Ireland have chosen to spend their gov $ differently than the US has.

[IT_IS_WHAT_IT_IS]

Yes it does mean that. There are two ways a government can pay for those programs, higher taxes or deficit spending. Both of which have a huge, negative impact on the economy.

[Agent smith]

And..... traditional high un-employment, inflation, and a very moderate life style.

No thanks. I like living by my wits not yours.

[Joe S]

It's hard to imagine a government offering universal health care while leaving other parts of society alone. At a minimum, it must raise considerable amounts in taxes. Alternatively, it may have nationalized some industries (such as oil in many countries). But it should be recognized that the profits of these industries could have remained in private capital markets and have been put to other uses. This is a hidden tax.

I don't know much about the governments of either Australia or Ireland. What makes you think that Australia is laissez-faire? And can you say whether Ireland does not make up for low business taxes somewhere else?

More fundamentally, government can not be large without having a significant impact on the economy. As they say, nothing is ever free. No, no human action comes without a cost. At the least, there is the opportunity cost represented by actions that were rejected. If government is large and active, that means that it is changing the nature of activity within society. This has economic consequences even if they are hard (or even impossible) to quantify.

[johma513]

Larger government always damages the economy because it doles out money politically. The best thing that any government can do is to end the income tax. This would dramatically increase the free market production. They should also re introduce risk to the system. I have heard greed blamed as the culprit of the banking crisis. What can counter greed? RISK The risk was removed by artificially lowering interest rates. Corporations could gamble with cheap money. There is no reason to even have a central bank like the Federal Reserve. The US government pays interest on every dollar that is in the economy. There is no way that a government can ever get out of debt, because only the principle of the loan exists in the money supply. This system is self defeating. We need change. Unfortunately, Obama will offer none. Government has been involved in medicine for 30 years. So how can the solution be more government? Other social services are most certainly detrimental to the economy. However, the most damaging issue in the American government is our sphere of influence. We started this philosophy in 1953, when we installed the Shah of Iran. We consider ourselves the policemen of the world in order to secure safety. But we actually weaken national defense with our stratigy. This is a massive waste of money. So large government hurts the economy.

[jimbo]

We do too whenever the damned DEMOCRATS aren't in control and keep their damned hands off the economy and regulation!