City, United, PSG, Real and Barcelona are in a league of their own when it comes to purchasing power, so yes, i agree you need to spend to be able to compete with them. However, unless you are one of those 5 teams i listed, spending for the sake of spending gets you nothing so it has to be complemented by a good operations and scouting team who can identify the right players as well as extracting as much as possible from departing players.
As mentioned already, in Germany you only have to deal with Bayern and i think Klopp realized it is much tougher in the PL when you have drunk spending like City and United, and that is why he has splashed the cash on the likes of Keita, VVD, Fabinho and Salah, each of which cost more than our previous transfer record before Klopp arrived. At Dortmund he bought a lot more "projects" while at Liverpool he has gone for more established players but still young enough with plenty of upside.
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