From unaffordable housing, to lack of access to higher education and health care, to extreme income and wealth inequality, to the existential crisis of climate change, the US faces many urgent problems that call for a substantially expanded, more active public sector. The question, however, is always: How do we pay for it?
In “Fiscal Rules for the 21st Century: How to Pay for the Public Sector,” J.W. Mason explains why this concern leads to a misdirected focus on non-problems of public finance, which can derail essential public initiatives—the stimulus in the wake of the 2008 recession, for example, and efforts to deal with climate change today—and lead to half-hearted, ineffectual solutions to America’s very real problems. Outlining nine key principles, Mason argues that the question of “How do we pay for it?” actually makes the case for an expanded public sector—not against it.
The critical point linking all Mason’s arguments is that the public sector not only has unique advantages in providing many goods and services, but it also has unique advantages in paying for them.