Arnold Kling  

NCH Podcast

Freedom for Happiness... A Review of My Review...

Paul Howard and I discuss the New Commanding Heights. That is, education and health care are taking over a larger share of the economy, and this is an important phenomenon for political economy.

COMMENTS (2 to date)
Thomas Sewell writes:
... education and health care are taking over a larger share of the economy, ...
Shouldn't this be that the public sector is taking over a larger share of the economy?
mike shupp writes:

The economy is in poor shape and the Federal government is running a deficit. Otherwise, there isn't any much evidence that federal and state spending is "taking over" the economy -- not by relentless leaps and bounds anyhow.

Military spending as a fraction of GNP has been declining (with some ups and downs) since the end of World War II. Government spending on R&D has been declining since the 1970's. The fraction spent on transportation hasn't changed much in recent years, unless you want to include spending on airport security. Housing is conspicuously on the back burner. Policing and courts and prison spending increase, but not by high percentages, year after year.

That leaves spending for education and health care, which DOES increase by more than the inflation rate, for year after year after year. PARTS of the public sector are taking over a larger share of the economy, which changes the environment for all the rest.

Your knee was recently repaired by surgery funded by Medicae. Your son is going to college with loans subsidized by the government. Your daughter was just laid off from her park historian's job and your brother-in-law at Boeing decided to retire when NASA terminated a contract for space shutle maintenance. Congratulations -- you're a normal US citizen.

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