Government Debt and Economic Growth - Some Comments; A Panel Data Analysis for Western Europe (1988 – 2006)

In the present paper it is pointed out that government debt is an obstacle to economic growth. To my belief, the remedy to this problem is to encourage consumption and not to impose taxes onto the consumers. Because, any decrease in their wages and salaries for temporary budgetary purposes, will further shrink consumption and will cause unemployment in the long run. Panel data covering western European countries during the period 1988 – 2006 are elaborated by means of Eviews software package