Needed: A fiscal framework.

fi scal stimulus package centered on " bang for the buck, " that is, on whether tax cuts or spending increases would produce more jobs. This limited perspective is very misleading, however: the choice of spending versus taxes should turn fi rst and foremost on the purposes of government, or what economists quaintly call " the allocation of resources. " It's silly to debate whether investing in a $100-million bridge creates more jobs than a $100-million tax cut if we need the bridge! The Amer-ican Society of Civil Engineers has long documented the crumbling state of U.S. infrastructure and the pressing need for $2.2 trillion in investments for our well-being and competitiveness. Government spending and taxation affect the distribution of income demographically and temporally. America ranks 22nd out of 23 high-income countries in public social outlays as a percentage of national income (ahead only of Ireland) for health, pensions, income support and other social services. Our political discourse tends to focus on the middle class and neglect the poor, whereas our tax and spending policies often benefi t the wealthy. As a result, the U.S. has the largest poverty rate, income inequality and per-capita prison population of any high-income nation, as well as the worst health conditions. The timing of tax cuts and spending increases also affects the well-being of today's generation versus future ones. The U.S. has a chronic fi scal defi cit because federal taxation, at around 18 percent of gross national product (GNP), is enough to cover only fi ve types of federal programs: retirement and disability, medical care, veterans' programs, defense and homeland security, and interest on the public debt. All other federal outlays—for education , diplomacy and international assistance, public administration , science and technology, sustainable energy, water and sanitation , roads, broadband, help for the poor—are in effect funded by borrowing. The chronic defi cit problem, now at least 5 percent of GNP, will tend to get much worse as the population ages and health care costs rise, until we fi nally choose to tax ourselves adequately to pay for the government we need and want (and have committed to by law in many entitlements programs). Temporary defi cits can boost the economy in a recession, although temporary income tax cuts and rebates tend to be saved rather than spent. Prolonged defi cit spending, however, would impose future burdens. The most obvious will be …