A recent study by the Sofia, Bulgaria-based Institute for Market Economics used the latest data from the Organization for Economic Co-operation and Development and found that governments in developed countries are too large relative to their private sectors, and sop up too much of Gross Domestic Product to maximize economic growth. Leave it to former Eastern European communists to teach us we’re going in the wrong direction with our massive government expansions into, well, everything — automobiles, manufacturing, energy, banking, insurance, housing as well as the impending health care industry takeover.
The U.S., by the way, is a member of the OECD. Interestingly, the video below, although not specifically aimed at government-run health care, proves that it is run better the less the government is involved and leads to longer life expectancy. The IME should know. They lived it under communism before its fall.
The IME study finds the government sector should be no larger than 25% of GDP (and perhaps considerably smaller) to maximize GDP growth.
The average government sector for the OECD countries now exceeds 41% of GDP.
The results indicate that policy makers who are enlarging their government sectors in the name of economic stimulus are likely to be retarding the renewal of economic growth and job creation rather than enhancing it.
The optimum size of government? The smaller the better and we’re going in the opposite direction.