In Britain, state spending has become such a huge part of the economy that in some places it exceeds the state spending levels Hungary and Slovakia had before they ditched communism in the 1990′s.
Government spending accounts for 49% of the economy in the U.K. Yet in places like Wales it is 72% and in Northern Ireland 78%.
As the economy continues to dive, government spending is expected to rise as well. This will continue a long trend of a larger government role in the economy. Even in southern England, the government is 36% of the economy, up from 33% just four years ago.
So what?
Whenever government spends money, it has to take away those funds from productive efforts or borrow it. In the former case, the government acts to discourage production; in the latter, the government drives up inflation.
In any case, a larger share of government spending is a malinvestment. Politicians and bureaucrats are always more interested in accumulating power, almost always at the expense of efficiency.