In theory, it should grow faster than GDP. Because government spending is inefficient but it is able to do things that the free market can't, so poor/less developed country should try to minimise it to enable fast, efficient growth, while a rich country should try to achieve the best results for everyone and that is done through government spending (fast growth is impossible anyway because it's done by adopting someone else' technology and when you are already the richest it's not possible as yours is the best one - fast growth is a catch-up growth).

In addition, it becomes inevitable because with high per capita GDP there is a lot of excess income which people want to invest because their needs are covered, and varying outcomes of those investments (even if purely random, by chance), tend to compound, which results in entrenched, systemic inequality, that might even crystallise into caste system. Only way to counteract it is more taxes and more government spending, so that there's less excess income left to invest, and outcomes of those less lucky are compensated by gov spending.

There's a meme that goes as such:

Step 1: It's not really happening

Step 2: Yeah, it's happening, but it's not a big deal

Step 3: It's a good thing, actually

I feel like this thread has fast tracked the steps.

I don't mean this to be insulting. I think you actually bring up interesting points. But perhaps could have not led off with step 1 and started with this.

Well that was more or less my initial point. Yes from 1950, spending has increased but it did so by introducing beneficial things like Medicare or Medicaid, and vastly more people under Social Security because of demographic transition. So it wasn't a bad thing. And after 1975, spending didn't increase much or at all. While it could and probably should have, to bring in more equality and improve quality of life for everyone.

But why should taxes scale GDP per capita? Growth means more production, controlled for inflation. Are citizens getting several times more services and goods from the government. It certainly doesn't seem like it. We dont have 10x more teachers per student, 10x more police, or 10x more public roads per capita.

Because if GDP per capita increases cost for services as well as number of required services increases.

Take a car analogy, if the GDP per capita increases such that the number of people who can afford a car doubles, the government will have to invest more in roads. Moreover the expectations to the quality of the roads will likely increase as well. In other words if more stuff gets done in a country your more likely to night more infrastructure and services to support it.

so you think we are getting 10X more services? GDP should already make it inflation independent.

Simple, because we keep making tax cuts for the rich, so someone has to fit the bill.

A lot of these problems wouldn't happen if we just had the 35% capital tax not lobbied down over the decades. Now we're going to 15.

how does that make sense. My claim is that the government is collecting more taxes than ever. 1,000% more than in 1940 (controlling for inflation). I ask why we are getting so little for that.

Your response is that we aren't taxing enough.

We should be demanding more from our government! Instead, one side is trying to tear it down, and purposely fights to make government worse so people want to tear it down.

I think that framing is close. One side doesn't think the government can do better. I'm usually in that camp. I don't think the federal government can do better. It is too far from the voters for oversight. The country is too big and diverse for what it is trying to do.

My dream government is that of Switzerland, which keeps the purse close to the people.

>Secondly, why does the government need to spend to match GDP? The more productive we are, the more the government spends?

I have been harping on this for years

Tax as a percent of the economy has gone through the roof, both as a percent of GDP, and as inflation adjusted dollars. If you compare to a benchmark like the 1940s, tax% of GDP has more than doubled, and GDP has increased ~4.5x. This means someone today pays about 10X the taxes (controlling for for inflation!). State and local taxes have grown even faster than federal taxes.

Is the government providing 10X more services per capita? Do we have 10X the schooling? 10X the police? 10X the roads?

These numbers are already scaled for both inflation and population, so it should actually productivity.