Small welfare countries like Denmark can make big taxes work and provide a high standard of living, but the bigger the state the larger the inefficiencies and so the less people get to benefit from those taxes
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I cant speak for other countries but in the US a big problem, in addition to the inefficiencies, is the pure cronyism that exits. You have the defense industry which is really based upon that. They "bride" both sides of the aisle to get what they want, which is enormous contracts.
That is how that pad their earnings every year.
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