by Mario Rizzo

I am not sure which is worse: superstitions based on science or superstitions pure and simple.

Many people would react to across the board cuts in government spending by saying something like: "This is crazy; some things are more important than others. We should cut the less important things first." And, indeed, economists would seem to agree. After all, the equi-marginal principle was one of the first "discoveries" of the marginal revolution. No sense cutting programs in such a way that some will have very high returns, however measured, at the margin while others will have very low returns. Irrational!

However, what is rational for a household or an individual need not be rational policy for the government. Why is that? Read more of this post