When it comes to policy debates, it’s now pretty clear that if you’d like to sound very quaint and old fashioned, be sure to express some concerns over the size of the federal budget and deficit spending.

Such concerns are now taken about as seriously by the average politician in Washington as is the constitutionality of the PATRIOT Act. Virtually no one cares.

This Friday marks one of the most important economic events of the year. But even Jackson Hole could not escape the threat of the latest variant, as the Kansas City Fed recently announced that due to an elevated covid risk, the event is to be held virtually.

The July/August 2021 Cato Policy Report hosted a friendly debate between Cass Sunstein and Mario Rizzo. Sunstein is a Harvard Law professor, a onetime member of the Obama administration, and coauthor of Nudge and other books advocating public policy applications of behavioral economics. Rizzo is an economist at New York University.

Aron Ravin, a self-described “nudnik,” who writes for National Review thinks so and I suspect others do as well. This thinking, however, is that of an ever-shrinking minority and it is hard to imagine the pro-legalization trend being reversed. Nevertheless, let’s look at the arguments and why he claims libertarians are so wrong on this issue. 

Our Federal Government’s Balance Sheet: Putting the Cart Before the Horse

The Financial Report of the U.S. Government for 2020 included a balance sheet with $6 trillion in assets and $33 trillion in liabilities, leaving a negative net position of about $27 trillion. Those reported liabilities exclude tens of trillions of dollars of unfunded obligations in Social Security and Medicare under current law and policy, indicating the $27 trillion in negative net position is far too optimistic.