Pros And Cons Of Unemployment

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In order to demonstrate that a tax reduction policy is a more fitting option than increasing public expenditures on goods and service as it relates to government combating unemployment, the author will commence by exploring the pros and cons of both concepts. The following are drawbacks to government spending:
1. Pettinger (2011) indicate that greater public spending prompts higher levels of taxation. Inflated income tax might potentially debilitate individuals from working. High organisational taxes may dishearten business entities from setting up operations in the affected nations.
2. Welfare government programs that are too generous might sway individuals from accepting work, thus causing voluntary unemployment.
3. Government
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Based on Economics Help (2008) tax cuts actually encourage people to work longer hours since less money will be deducted from the earnings and job seekers will be more eager to enter job markets owing to the potential benefits. While opponents of tax reduction policy argue that tax reductions only serve the affluent as it can result in a reduction of government services - upon which many low income earners depend on (Cloutier, 2007). In other words, when taxes are reduced the government of a country has less money to support a wide range of essential infrastructure - like roads, bridges and dams (Ingram, 2011). In addition, the government will have less to cover indebtedness (Ingram, 2011).
Given the pros and cons of government spending and tax cuts, it is clear that while public spending has the potential to increase employment - many of the employments are short-term oriented as in many of the jobs affect the construction industry. Although, after buildings are erected - more jobs are normally available. As for tax cuts, the associated savings can be reinvested to provide long-term
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