The U.S. State Will Expand Whoever Wins
August 19, 2012
Commentary by: Lawrence Summers, Charles W. Eliot University Professor and member of the Belfer Center Board of Directors
Topic: U.S. economy
“With the selection of Paul Ryan as the Republican vice-presidential candidate, it is clear both political parties agree that the central issue in the presidential election will be the scale and scope of government involvement in the US economy. There will be disagreement over what constituted ‘normal’ levels of spending in the past and indeed over what constitutes ‘spending’. But there is a widespread view in both parties that it is feasible and desirable that in the future the federal government will be no larger as a share of the overall economy than it has been historically.
Unfortunately, this aspiration is unlikely to be achieved. Even preserving the amount of government functions the US had before the financial crisis will require substantial increases in the share of the economy devoted to the public sector. This is the case for several structural reasons.”