Calls for a review of government support policy

Calls for a review of government support policy

1/2/2016 0:00

BAGHDAD - Imad emirate

is government support of the most prominent policy of the policies adopted in developed and developing countries alike and different approaches or methodologies applied by the nature of the prevailing economic system in each country, as they contribute to the alleviation of disparities in income levels and re-distributed for the benefit of people with limited income especially the poor, through the network of social protection, which is an important tool to reduce the cost of economic transformation towards a market economy adoption.

this was announced by «morning» economic expert from the College of management and Economics at the University of Mustansiriya saying, among other tasks, which seeks support policies to achieve, particularly in developing countries is the provision of basic food commodities for individuals fixed and specific quotas by following the ration card, which is the most prominent government support mechanisms due to lack distinctiveness between rich families and poor families regarding the quality and quantity of subsidized goods and given to the families within this system.

He d. Ahmed Hafez al-Tai: Despite the economic importance of the policies of government support being one of the important policies in providing necessary for the poor and needy at low prices for basic goods, but at the same time, these policies negative repercussions on the national economy, and it can clarify the arguments outs and supporting the policies of government support according to the visions of economists.

He explained that the arguments in favor of the policies of government support that runs from the fact that the widening economic disparities between individuals in the same society, which is a reason for government intervention to achieve part of the social justice that does not require set up to achieve full equality in wealth and income, but the alleviation of inequality by following support policies of

the government.

confirms economic studies that direct government support for the purpose of influencing consumption are in accordance with the policy in line with the economic level of each country, so we find that government support in developing countries aimed its impact on consumption to raise the standard of living of low-income people, in developed countries, the impact on consumption varies depending on whether the state has reached a state of full use, or not yet arrived.

He Tai that the expenditure of government support social repercussions positive, being directed towards improving the health and housing conditions and raising the welfare of the workers, as well as raising the level technical workers, and lead this type of investment to raise the productivity of workers and thus increase the national output, and knows this type of investment (b humanitarian investment), and support expenses directed towards increasing the size of the population and to maintain their health, and this leads to increase the national output, too, as well as support for food goods and services for children, and increases the importance of this kind of support in countries that suffer from a lack of population size.

he went on we can say that if the government support a social nature, the goal of the foundation to raise the social level of individuals, which takes the form of direct cash transfers work the redistribution of income vertically, either if subsidies are a cost-dye, the goal of the foundation reduced prices Enterprise products or increase their profit or protect national industry which leads to a redistribution of income

horizontally.

on the other hand, between al-Tai said arguments that reject the policy of government support that runs from the most important economic criteria inflexibility of the ration card system in order to suit the needs of the beneficiaries in accordance with the economic to their situation, as well as the absence of political will to reform the work of the ration card mechanism by developing and diversifying and increasing vocabulary, and the support provided to the individual by the social protection program is not enough to meet the essential and basic needs not especially as the inflation rates in the state continues to rise, and this contributes to increased rates of unemployment and reduce worker productivity and make labor markets more rigid and prevent innovation and creativity which, as well as it limits the investment directed towards the private sector, especially the long-term investment, as it leads to continued pressure on the government for subsidies and loans, grants or customs facilities to undertake projects no longer an economic interest of society in general as much as Mataud interest serve the product beneficiary of government support, in particular.

He said al-Tai Pan facts economic suggest that increased government support to do not lead to increased per capita gross real GDP, as he was in the great Depression, for the period from 1929 to 1932 it doubled the USA the proportion of government spending to GDP from 11 percent to more than 22 percent, however, the unemployment rate continued to 20 percent until the beginning of World war II.