ECON 375 Lecture Notes - Lecture 3: Fiscal Policy, Station Wagon, John Rawls
Document Summary
Taxing and spending decisions of the government: one size fits all policy. Just make one car for everyone or vote on 2. Would be cheaper to have one type of car- more resources for healthcare etc. Our preferences don"t line up with those around us. Your yellow station wagon doesn"t make other people protest. If choices are good for consumers, why do we artificially limit our choices by collective decisions. More decisions that we have made by centralized authority, the more confused we are. This is not maximizing our happiness this doesn"t take place in the market economy. Doesn"t take into account the intensity of the decisions. Fiscal policy is not voluntary- it is done by force by those who didn"t vote for it. I was impartial about the president, but some people really care. Some people have an extreme preference, and some are indifferent- inefficient. Share of total income (how much they earn of usa income.
