Friday, May 05, 2006


Via Brad de Long, this retrospectively penetrating glance into the obvious:

What happens if you lower the cost of something? People buy more of it. What if you raise the cost? People buy less of it. So: what happens if the federal government reduces taxes and runs a deficit -- thus lowering the "cost" of government? People will "buy" more government. This actually makes a strange kind of sense -- if there are no additional taxes to cause you pain, why shouldn't you support big government?
And if the Cato Institute says it, it can't be some liberal idea...

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