Todd D. wrote:When you increase government spending (centralized economy), you must therefore take money from somewhere else, usually the private sector (consumption and investment).
You are still talking about free market Western countries, not command economies. In a command economy there is no "private sector".
Todd D. wrote:The result of this is that you generally have to either rely more heavily on Exports (which increases the national debt) or you decrease private spending, which decreases the incentives for businesses to prosper.
Where on earth did you get this notion from? Please explain.
Command economies do not grow by exporting and 'accumulating national debts' (Side note: in any event exports mean revenue not debt) they grow like all economies,
by investment.
Todd D. wrote:The basic principle for GDP is Consumption+Investment+Government Spending+(Exports-Imports).
You seem to be forgetting that in a command economy (or command elements of Western economies) Investment and Government Spending are not mutually exclusive. Indeed, in a pure command economy all investment is government spending. The great (theoretical) advantage of the command economy is that the government can take the conscious decision to invest a higher proportion of GDP and thus actually achieve
faster growth than a market economy. This is demonstrated by the USSR under Stalin, which grew at a faster rate than the recession hit economies of the capitalist West during the inter-war years.
Whether faster growth can be sustained in practice in the long run is another matter all together, and one that the world's command economies seem to have failed in for reasons varying wildly depending who you ask.