Taxes, Spending, and the U.S. Government's March towards Bankruptcy

This book proposes a better fiscal language and understanding for US budgetary policy.

Daniel N. Shaviro (Author)

9780521689588, Cambridge University Press

Paperback, published 4 December 2006

262 pages
22.9 x 15.2 x 1.5 cm, 0.39 kg

“Daniel Shaviro has performed an important public service by showing how our thinking about the federal budget has not kept pace with advances in economic analysis. Although we are now in the age of the Internet, we are still using horse-and-buggy budgetary terms and presentations. The result is that both policymakers and the public are misinformed and ill-informed about the looming fiscal crisis when the baby boomers retire. When that day comes, it is essential that everyone has a better understanding of the nature of the budgetary problem and options for dealing with it. "Taxes, Spending, and the U.S. Government's March Toward Bankruptcy" is a big step in providing that understanding.” --Bruce Bartlett, Nationally syndicated columnist

The United States is moving toward a possible catastrophic fiscal collapse. The country may not get there, but the risk is unmistakable and growing. The 'fiscal language' of taxes, spending, and deficits has played a huge and under appreciated role in the decisions that have pushed the nation in this dangerous direction. Part of the problem is that by focusing only on the current year, deficits permit politicians to ignore what is looming down the road. The bigger problem lies in the belief, shared by people on the left and the right alike, that 'tax cuts' and 'spending cuts' lead to smaller government, when in fact the characterization of any new policy as a change in 'taxes' or in 'spending' is purely a matter of labeling. This book proposes a better fiscal language for US budgetary policy, rooted in economic fundamentals such as wealth distribution and resource allocation in lieu of 'taxes' and 'spending'.

Part I. Labels and Consequences: The Failure of our Fiscal Language: 1. Fiscal language and the fiscal crisis
2. Taxes, spending, and the size of government
3. Fun and games with budget deficits
Part II. The Why and How of Long-Term Budgeting: 4. What are we talking about when we talk about budget deficits?
5. Long-term measures in lieu of the budget deficit
6. Fiscal gap politics
Part III. Labels and Policies across Budget Categories: 7. Benign fictions? Describing social security and Medicare
8. Tax expenditures
9. Welfare, cash grants, and marginal rates
Part IV. Conclusion: 10. Some modest proposals.

Subject Areas: Financial law [LNP], Finance [KFF], Political economy [KCP], Politics & government [JP]