Question

In: Economics

John is complaining about how inefficient and greedy governments are. “Why are they such beggars? They...

John is complaining about how inefficient and greedy governments are. “Why are they such beggars? They keep asking people for money all the time. Is it not that they are supposed to offer us facilities and take care of us. Instead individuals, households and business houses, all of us, have to keep feeding them all the time.” He is expressing his alarm in an agitated voice as he rambles on. “They come for you in all forms. They will be strict and make you pay a part of your hard-earned money as taxes. And as if that is not enough, they want to take your money and give you back some T-Bills.

Is John’s displeasure with the government justified?

Solutions

Expert Solution

Present days government is called the welfare government. The government is supposed to work towards the well being of the entire society. The state is no longer a police state. The government collects tax revenue from the people who have enough money. The government levies the direct as well as indirect taxes on the people.

The government system is not well efficient, the expenditure which is incurred by the government, do not reach the right people. the inefficiencies in the government sector make it unproductive and facilities do not reach the right people.

Government tends to make provisions of public goods that can be provided by the private sector, Apart from this, government activities produce strong positive externalities. The government can deliver magnified outcomes if the efficiencies can be raised in the government sector.

Here, John is right to some extent that we are not getting the right amount of government facilities, These facilities must be according to the tax collection by the government. Government officials do not take a pain in raising the level of efficiency and good governance.


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