Reducing the size of government and, therefore, the amount it takes in tax frees up money which consumers can spend on goods or for companies to expand: Both create jobs  Government costs money. That’s an indisputable fact. So that raises the question of whether that’s the best way of spending it. It is clear that money could be spent in other ways and so if this is the choice there is an opportunity cost in that decision as there is in any other.  There is compelling evidence that reducing the government’s take of total GDP stimulates the economy through freeing up funds to create jobs especially in manufacturing.  There is compelling evidence [i] that reducing the tax burden and unleashing the dynamism of the market by cutting regulation has a far greater effect than government massaging unemployment figures by expanding its own employment base. Indeed it also appears to be the case that the relatively high level of government salaries in fact just puts greater pressure on employers in the private sector to compete the resulting wage inflation has a dampening effect on the economy as a whole at a time when it can least afford it.  It’s further worth noting that jobs created during a recession tend to morph into permanent positions thereby building in an ever-continuing expansion in the size of the state unless it is periodically and deliberately culled.  Conversely the investment directly into the private sector creates wealth producing jobs that are paid at a level that is sustainable and is responsive to the health of the wider economy.  [i] Alesina, Ardagna, Perotti, Schiantarelli. “Fiscal Policy, Profits and Investments”. National Bureau of Economic Research. 1999