Tuesday, September 07, 2010

A starving Leviathan?

P. Krugman posted today that:

"there’s a pretty good argument to be made that we are, in fact, starved for public goods in this country, so that it would actually be a good idea to shift some resources to public goods production even if we were at full employment."

Now, Federal Government spending in 2010 is what, $3.7 Trillion? Toss in State and Local spending and we get a total government spending figure of around $6.4 Trillion.

That's Trillion with a "T" and, that's every freakin' year. And we somehow can't produce nearly enough public goods?

If that is true, every single elected offical should be tossed into stocks and given a few turns on the rack.

Total government spending is predicted to level out at over 40% of GDP and we are "starved for public goods"?

Krugman, please!!!!


Anonymous said...

Except how much of the state and federal budgets actually fund public goods? I would guess transfer payments represent a multiple of public good provision.

Dirty Davey said...

Well, we are pissing away a giant portion of those trillions in the deserts of Iraq and the mountains of Afghanistan, to no apparent public good.

Norman said...

I probably wouldn't mind government making up such a large part of the economy if it weren't so terrible at its job.

David said...

I bet he'd get really irritated if someone pointed out that, in his example, roads are rival and at least potentially excludable, meaning they are no more public goods than, say, an elevator in an office building.

twv said...

Repeating what others have said: Today's government is expert at providing private goods and calling them "public goods."

For the life of me, there's nothing more I want from our government, and don't know what Krugman is suggesting. The new services that have excited me in the last ten years have come, mainly, from private businesses on the Internet. iTunes has done more for my happiness than anything the government has done, with the possible exception of keeping alive a friend on AIDS.

Richard P. said...

Isn't Krugman just pointing out what Downs said in 1960?


"Why the government budget is too small in a democracy." 1960 World Politics

Personally, I read the Downs' article and didn't really get where the flaw was. Maybe it has to do with the invalidity of rational political action at the macro-level.

Maybe Munger can comment.