What are the real core functions of government?

Guest column in Knack
Kevin Spiritus
Erasmus School of Economics

In late October, Flemish magazine Knack published a guest column by Kevin Spiritus, Assistant Professor of Public Economics at Erasmus School of Economics. In it, he addresses the questions of whether the current generation will really be less well off than the previous one and what the core tasks of the government are. 

Many are convinced that young people today are less well off than their parents. Yet there is no clear evidence of this. We see that young people consume more, travel more often, eat out more often, and have access to better technology than their parents. Younger generations are more satisfied with their lives, and they have a higher, healthier life expectancy.


Yet there are significant challenges ahead. Behavioural adjustments and expensive investments are needed to reduce the impact of global warming. And although the quality of our environment has improved in many ways, we are bumping up against limits with our water management, nitrogen policy and use of space. We will have to live differently, smaller and closer together.

Not all challenges are bad news. It is good news that more people are reaching older ages. And who is against innovations in healthcare, if we live longer and healthier lives? But living longer means higher costs for pensions. And new cures are expensive. The question arises of how we share the progress. Will everyone become responsible for their own pensions? Will we have to work longer? Will new cures remain the preserve of the rich? How do we divide costs between generations?

Distribution problems are easier to digest when the economy is growing - within ecological limits. Unfortunately, growth is difficult to control. People often refer to deregulation, for instance in the labour market. Fiscal reform also comes to mind.

Budgetary problems of the government

Despite high revenues, our government is struggling with a large deficit. Yet it fails to properly perform a number of core tasks. Consider poverty reduction, queues in healthcare, and the quality of childcare and education. Moreover, government spending naturally increases to keep wages in line with the private sector. To solve fiscal problems and better fulfil its duties, the government has a number of options. It can raise taxes - although for many, it has reached the limit. It can reduce its spending, for instance by working more efficiently. But we should also enter the debate on what are really core tasks of government. For example, is it normal for Belgium to spend so much more on economic subsidies than other countries?

Without any big surprises, the next generations do have it better than the previous ones. Still, the distribution issue remains important, and the budget must be in order. The longer one waits, the more radical the necessary reforms will become. And the greater the risk of being forced out by the financial markets. It is high time to act.

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