government spending

Yes you make less money than if it was lower but if your economy is good enough it's not a problem. And the higher your spend rate the quicker things are built.

~SDC~

You don't lose your money, you spend your money.
Look at it this way: If you don't set to 100%; all the money you have isn't invested, you get no benefit from that capital. You wouldn't keep all your money in a chest if you could invest it somewhere where you can get some benefits from it, would you? Same here. You can build nothing and hoard money, but this will ruin you long-term more surely than using all the money you have now to build an infrastructure (planets, PQ, population, social improvements, techs) that will give you more money later.

Galciv like most 4x games requires you to expand to survive (yes there are very rare exceptions). The expansion phase is at the start of the game so maximising spending maximises expansion. Later on you will probably have to reduce spending to keep a positive bank balance.

Paul.

~SDC~

...unless you can boost your income through good trade routes or through selling stuff to the AI.

~SDC~