Consumers and Government Spending

This chapter explores the connection between government spending and consumer interests. The discussion begins by highlighting government purchases for such things as transportation, defense, and schooling, in regard to which the average consumer is both beneficiary and taxpayer. The discussion then describes the process of decision making in which programs of public spending are composed and debated—a process in which consumers can participate. Finally, the chapter takes up the matter of countercyclical spending. Government spending can be raised to fight recessions, or lowered to offset excessive growth—the issue is whether countercyclical deficits have a place in the modern mixed economy.