The fiscal crisis of the state

"I'm reminded of James O'Connor's The Fiscal Crisis of the State, written in 1973. State spending in a capitalist society, he said, must fulfil two functions: to raise profits, for example by maintaining aggregate demand; and to legitimate the system by ameliorating inequalities. But, he said, these forces for higher spending increased faster than people's willingness to pay tax. The upshot was a tendency to bigger budget deficits, even in decent economic times."

Read this article
Written on Friday, May 29, 2009