Homeownership: Case Study
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Each dollar spent by the government necessarily implies that a dollar less is spent in the productive economic sector. This diminishes growth because economics forces direct the resource allocations, within the private sector, while political forces dictate when bureaucrats and politicians decide amount to spend. Certain government spending, for example sustaining a proper-function legal system could have a greater return rate. However, in general the governments do not efficiently utilize resource which results into minimal economic output.
Government spending twists allocation of resources. Sellers and buyers in a competitive market decides prices in a process, which guarantees the best way of resource allocations, however certain government policies influence market competition (Aghion &Patrick, 2007). In education and health care for example, the government subsidies to cut out-of-pocket costs have resulted in third-party payer