by Staff Report, The Daily Bell:
The debate about shrinking government is mostly wishful thinking … With the selection of Paul Ryan as the Republican vice-presidential candidate, it is clear both political parties agree that the central issue in the coming presidential election will be the scale and scope of government involvement in the U.S. economy. There will be disagreement over what constituted “normal” levels of spending in the past and indeed over what constitutes “spending.” But there is a widespread view in both parties that it is feasible and desirable that in the future the federal government will be no larger as a share of the overall economy than it has been historically. Unfortunately, this aspiration is unlikely to be achieved. Even preserving the amount of government functions the U.S. had before the financial crisis will require substantial increases in the share of the economy devoted to the public sector. This is the case for several structural reasons. – Reuters/Lawrence H. Summers
Dominant Social Theme: The path we are on toward larger government and more federal expenditures in the US (and the West) is an inevitable one. We have no choice other than to live this way and discuss what (helpful) services we will disallow.
Free-Market Analysis: Here comes Lawrence H. Summers to tell us that shrinking the US federal Leviathan is at least improbable. Summers is very good at this kind of thing. After Milton Friedman passed away, he wrote an article entitled, “We’re all Friedmanites Now.”