By RICHARD ROSE
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Extra info for Can Government Go Bankrupt?
The social engineer may regard it as bad news that societies are "incapable of being shaped"; 3 but citizens may regard this as good news, areminder that there are limits to the ability of any government to gain total con trol of society. Even the most efficient and imaginative government finds that when it seeks to determine what the economy does, its authority is vulnerable from three directions-from below, sideways, and from above. Governments are immediately vulnerable to the erosion of their electoral base if they fail to make the economy produce what they have promised.
To tell citizens of Boston or Bonn that they are better off than citizens of Bristol or Bologna may not cause general satisfaction, but it does provide a comparative basis for assessing how well a country is doing. This book systematically compares six major Western countries: America, Bl'itain, France, Germany, Italy, and Sweden. All are democratic and aB are afHuent. In terms of gross national product, America ranks first in the world, and Can Government Go Bankrupt? Germany, France, Britain, and Italy are among the world's eight richest nations.
Taxes can be levied even in the absence of profits. Sales taxes and European Value-Added Taxes give government a percentage of the gross revenue of financial transactions, whether those involved are rnaking a profit or loss. The limits of the political econorny can be surnmed up in a simple equation: The National Produet = The Costs of Publie Poliey + Take-Horne Pay. With a given national product, government can only increase take-horne pay if it cuts the costs of public policy. Alternatively, it can increase spending on public policy by cutting the take-horne pay of citizens.