بخش سوم کتاب Gruber

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APPLICATION: The Congressional Budget Office as Gatekeepers
•The methods and results derived from empirical economics are central to the development of public policy at all levels of government.
•The Congressional Budget Office (CBO) “scores” policy proposals by estimating their budget implications.
•CBO scoring uses the theoretical and empirical tools of public finance.
•CBO scores can determine the fate of legislation.
Decentralization
•A key feature of governments is the degree of centralization across local and national government units.
•Centralization:  The extent to which spending is concentrated at higher (federal) levels or lower (state and local) levels.
•In the United States, state and local spending is about one-fourth of total government spending.
Distribution of Spending
•Public goods: Goods for which the investment of any one individual benefits everyone in a larger group.
oExample: Defense spending
•Social insurance programs: Government provision of insurance against adverse events to address failures in the private insurance market.
oExample: Health insurance
•Over time, spending has shifted dramatically toward social insurance, especially health insurance.
Regulatory Role of the Government
The government regulates a wide range of economic and social activities:
•The Food and Drug Administration (FDA):  food, cosmetics, drugs, and medical devices.
• The Occupational Safety and Health Administration (OSHA): workplace safety.
•The Federal Communications Commission (FCC): radio, television, wire, satellite, and cable.
•The Environmental Protection Agency (EPA): pollution of air, water, and food supplies.
Why Study Public Finance Now? Policy Debates over
Social Security, Health Care, and Education
Many heated policy debates concern the impact of major public programs:
•The role of Social Security, health care, and education are all contentious subjects.
•“Liberal” and “Conservative” positions hold differing views on how to approach these major policy issues.
Why Study Public Finance Now? Social Security
 Social Security is the single largest government expenditure program.
•The financing structure of this program is basically that today’s young workers pay the retirement benefits of today’s old.
•As the population ages, it is increasingly difficult to fund.
•Liberals argue that we should raise necessary resources through higher payroll taxes.
•Conservatives argue that, rather than transfer from young to old, we should encourage people to save.
Why Study Public Finance Now? Health Care
•49 million Americans lack any health insurance, about 18% of the non-elderly U.S. population.
•The Affordable Care Act (ACA) promises to cover 32 million, using mandates and subsidies.
oSupporters argue that the ACA corrects serious market in the insurance market.
oOpponents charge that it represents an enormous, expensive, unwarranted expansion of government power.
Why Study Public Finance Now?  Education
There is an enormous dissatisfaction with our current educational system.
•In 2009, the United States ranked 17th in reading, 23rd in science, and 35th in math skills in a study of 65 countries.
•Will more spending improve educational outcomes?
•Or might competition among schools help?
Conclusion
•Government plays a central role in the lives of all Americans.
•There is ongoing disagreement about whether that role should expand, stay the same, or contract.
•The facts and arguments raised in this chapter provide a backdrop for thinking about the set of public finance issues that we explore in the remainder of this book.