6.7.1.5  Funding by Taxation or Government Borrowing

(This is an archived extract from the book Patterns of Power: Edition 2)

The hardest aspect of government spending is raising the money to pay for it.  Politicians may try to choose taxes that are less visible or less unpopular (3.2.4.2), or they may try to evade hard decisions by borrowing – which delays the impact of increased levels of spending, although the debts have to be repaid with higher tax later (3.3.8.1).  There is a temptation, in democracies, to defer political pain for electoral reasons – despite the obvious unfairness of passing the pain to later generations who have not benefited and who did not participate in the decision-taking.  Some governments have even resorted to concealing the truth about deficits, as was the case with the Greek government’s decisions that ultimately precipitated the 2011 Eurozone crisis.[1]

© PatternsofPower.org, 2014