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Ireland teaches Sanchez that it is not necessary to spend more to improve the lives of citizens

Economist Lorenzo Bernaldo de Queiros wrote an interesting article in which he shows that spending more public money does not…

By admin , in news , at May 7, 2022

Economist Lorenzo Bernaldo de Queiros wrote an interesting article in which he shows that spending more public money does not necessarily mean that the standard of living of a country’s citizens improves. To prove this, compare the development of Spain country with high public spending (France), mean, medium (Germany) and a little (Ireland) Who gets out of Ireland better.

High public expenditure is considered to be one that exceeds 50% of GDP. Medium is between 40% and 50%, and small, is below 40%. Spain has risen to 51.5% in the last two years.

Quirós shows in his article that the public sector in small countries is 8% more efficient than in large states and 11% more than in medium-sized states.

Proponents of increasing government spending argue that by doing so inequality And this poverty, but Quirós demonstrates with several graphs that this is not true. The first shows comparative development Social spending relative to GDP between Spain and the three selected countries.

Spain has increased the percentage of public social spending on GDP over the past three decades and until 2010, the year it stood at the same levels as Ireland and Germany. Since then, its development has been similar to that of Germany. It is 7.5 points below France and 9.3 points above Ireland. The latest comparable data is from 2018.

The following graph shows the evolution of danger of poverty in four economies before considering the impact of social transfer. The ratio used to measure the risk rate of poverty is used by Eurostat: Percentage of population whose income level is 60% below the national average. “It is an indicator that is very broad, but it is used in an internationally standard way. For the purposes of poor people, severe physical uncertainty is more accurate, which in the case of Spain is lower than the EU average ”, indicates Quirós.

It looks like Ireland has been reduced This percentage has increased by 9 points in the period between 2010 and 2018. It remains at a constant percentage of around 24–25% of the population in Germany and France, and between 28% and 31% of the population in Spain.

The following graph shows the trajectory of the population The risk of poverty after social transfer Produced in each of these countries with the public social spending analyzed in the previous lines.

percentage of Population at risk of povertyAfter social transfer, a very different development has been reflected in the countries. in Ireland lie down in between 15 and 17% of the total (ie, 16 to 25% less than the same rate before social transfer); In France, about 13-14% (10 to 11% less than before social transfer); in Germany, 16% (8-9% less before distributing transfers), and in spainIn this 20-21% (9.5 and 6.4% less than before social transfer). The European average in Europe of both 19 and 27 remains constant at 17% of the population (about 8-9% less than before the relocation).

Quirós conjectures that it is possible to check with these results ability of social support systems in the countries analyzed; Its effect on the percentage of the population at risk of poverty after migration. Ireland is the country in which redistribution policies have worked best, Following social transfer, the percentage of Irish people at risk of poverty fell by 25% in 2010 and 16% in 2018. The ranking follows France; It ranges between 10 and 11%, but with negative effects on economic growth, in exchange for a lot of financial pressure. In Germany and Spain, despite the fact that social spending accounts for 24–25% of GDP, the poverty gap has narrowed to only 8–9% in the case of Germany and 6–9% in the case of Spain. In recent years, closer to 6%).

In Quirós’s opinion, the figures show that The current social security model in Spain is the least efficient of the EU countries And this organization is well below average. «Spain does not have to spend more, but better and, perhaps, less. The point is to ensure that social assistance programs are well designed and executed. Therefore, linking the expansion of public spending to the achievement of higher White Income distribution may be a catchy political slogan, but it does not correspond to reality,’ he says.

Quirós would be in favor of the Spanish state carrying out its basic functions in a more effective and efficient manner, focusing on creating an institutional framework that would protect property rights and the rule of law, provide essential public goods and establish a system basic social coverage To focus on improving the conditions of those living at the bottom rung of the income distribution.

« Subsidized and majority Spain results constant pressure To increase public spending from which they benefit and the taxes that finance it,” he points out.

Quirós assumes that a modern civilized society It must have a network for those who fall into misfortune, but affirm that the current system encourages real or imaginary unfortunate people to grow up and move from private to private for their greater security and remuneration. Prefers to go to public sector. «A critical observer would say that a good part of subsidized Spain also pays taxes, and this is true, but it is also true that their income comes from the amount paid by those working in the market. Taxes from pensioners who pay taxes or from public servants do not, on average, cover even half of what they receive, citing two paradigm cases,” he concluded.