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QOTD May 8, 2007

Posted by federalist in Economic Policy, Government Spending.
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Courtesy of Stephen Dubner, quotes from Tyler Cowen’s Discover Your Inner Economist:

A good intuitive economist approaches a practical problem by asking “What is the relevant scarcity hindering a better outcome?” If we haven’t posed this query, and assembled at least the beginnings of an answer, we may founder. For instance, we might make the mistake of throwing more money at a problem, when money is not what is needed. By identifying the relevant scarcity, we learn where to direct the incentives.

Also today, Will Wilkinson illuminates the forces that keep our government running up debt for (non-investment) entitlement spending.  The long and short of it: Old people are an overwhelming political force, and they don’t mind holding a party for themselves that others will have to pay for after they’re dead.

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