There are a couple of fundamental questions at the bottom of Washington’s ongoing battles over deficits and debt: (1) How big should the U.S. government to be? and (2) How should we pay for it? The answers to both will ultimately have to be political ones — messy calculations based on who pays, who benefits, who votes, and who makes the campaign contributions. But it would be nice to know what the economics are, wouldn’t it?
How Big Should Government Be?
The U.S. could get away with higher spending — but only if taxes get less progressive.
January 21, 2013