Question

Identify the main contradiction in public opinion surrounding the issues of taxation and government spending. What is the potential outcome of this contradiction?

Answer 1

The main contradiction between the public opinion surrounding the issue of taxation and government spending is that government should spend more and tax lesser. People generally fail to understand that what the government is spending is only the amount they have collected as tax.

If the government taxes less and spends more the government will add up to the deficit which has other harmful effects in the future. For example, the government can fill those deficits by printing more money or borrowing from the foreign nations if not locally. Both these measures will increase the inflation rates in the nation and make things costlier. If the government choose to borrow from the foreign nation then in they are just putting the burden on the coming generations.