Steady and appropriate economic growth means an increase in the production of goods from an economic point of view. Other things being equal, this goes hand in hand with better care for society. Overall, this is interpreted as an increase in the material prosperity of society.
Business Formation lawyer: Reasons why economic growth is a goal
Increase in material prosperity: In order to achieve this goal, economic growth is a prerequisite. It includes not only an absolute increase in prosperity but also the reduction and elimination of material poverty.
Reducing unemployment or avoiding it: Regardless of how it is implemented, a market economy is characterized by competition. This competition promotes increases in productivity in companies in order to achieve higher revenues and ultimately profits. However, if economic growth remains the same, an increase in labor productivity leads to a decline in employment. After all, constant growth means that production in companies also remains constant.
Fiscal reasons: Put simply, economic growth means higher tax revenues for the state. This is where Business Formation lawyer comes in. Growth increases the tax base through increasing consumer spending or higher incomes. Even if the tax rates remain unchanged, the state will get more revenue. He can use this additional income for additional expenses that lead to an increase in the quality of life. For example, additional investments in the areas of education, environmental protection or health.
International influence: The “economic” size of a country is measured by GDP and economic growth. The larger a country is relative to the other countries, the more economic influence it can have on these other countries. One example is through additional payments in development policy or through pressure in the form of trade sanctions. In addition, a country’s share of the vote in some international organizations is measured by its GDP.
Business Formation lawyer: Benefits of economic growth
- Growth increases the standard of living measured as GDP per capita
- Economic growth secures employment
- Growth means more tax revenue for redistribution and social policy
Business Formation lawyer: Disadvantages of economic growth
- Growth destroys natural resources
- Economic growth damages the environment
- Growth means living at the expense of the next generation
The arguments against economic growth are almost all about dealing with limited resources and the associated consequences. In other words, it is about the conflicting goals of growth and the environment.