With a hat tip to the Adam Smith Institute, Why government doesn’t cut spending (even though it should) — a brief introduction to Public Choice Theory:
Cutting spending concentrates costs on a few. Cutting taxes disperses benefits across a great many. That means lobbying to avoid spending cuts is more fierce and commonplace than lobby for tax cuts. State spending creates powerful lobbying forces but weak protests.
That promotes growing state spending. It means that projects like High Speed Rail or wind farms (for example) do not generally arouse anger beyond those people who will have to put up with the downside.
The situation is even worse than presented in the video. Politicians can’t raise enough tax to cover the cost of their spending pledges, so they run deficits, impose debt on future taxpayers and debase the currency, or allow it to be debased by the banking system.
All that caused the banking crisis.
In as far as we have a “broken society”, “a broken economy” and a “broken politics”, these are prime contributing factors. It’s why politics is awash with lobbyists. It may substantially explain the distortion in the economy towards the South East, housing and the financial sector.