The federal government incurred a deficit of $123 billion for the first nine months of fiscal year 2007, CBO estimates, $83 billion less than the shortfall recorded during the same period in 2006. Revenues have risen by more than 7 percent, whereas outlays have grown by less than 3 percent. Both rates of growth are noticeably smaller than the rates of increase in fiscal years 2005 and 2006, which averaged about 13 percent for revenues and close to 8 percent for outlays. (click on CBO logo for report)

There was a time when I thought Louis Menand, an academic who writes for the New Yorker, was the smartest guy around. But I've changed my mind, because his review of Bryan Caplan's really ridiculous book is abysmal and totally misses the point. To recap Caplan's argument: Irrational voters support economic policy that makes people worse off. And government mostly messes everything up (See here for more). Menand's conclusion:

EPI just put out two very interesting papers (on full employment and demand-led growth) that challenge the wisdom of low-impact macroeconomic policy. Two general points:

• There doesn't have to be a trade-off between efficiency and fairness. Indeed, policies could generate demand-led growth partly by ensuring that work was fairly rewarded.
• Government can play a constructive role in the economy- guaranteeing fair wages, promoting growth, ensuring full employment. The best it can do isn't just to "get out of the way."

Inclusion has put a challenge to the progressive policy community. What is an all-encompassing issue that nobody really knows exists? According to this logic, alternative and less familiar ways of framing rising economic inequality and insecurity aren't viable because they don't show up on the pollster's static list of "issues." But this ignores Perlstein's most important insight, that "the greatest politicians create their own issues, ones that no one knew existed." (An insight I couldn't help but notice that is very similar to my favorite one of the late philospher Richard Rorty: "the talent for speaking differently, rather for arguing well, is the chief instrument of cultural change.") Here's a shot: exploitation and economic fairness.