The primary source of waste in government is that legislators are often under heavy pressure to vote for projects that will benefit their campaign contributors, even when those projects fail a simple cost-benefit test. But with the Supreme Court showing little interest in permitting tighter rules on campaign contributions in recent years, there is little reason to be optimistic that we'll start curbing this kind of waste any time soon.

If government is inevitable, the challenge is to come up with the most effective one possible.

The most common mistake we make as teachers is attempting to tell our students too much.

The fact that many private expenditures are mutually offsetting actually happens to constitute a remarkably good bit of fiscal news. Mutually offsetting spending patterns are wasteful in the same way that military arms races are. In such situations, if each party spends less, nothing is sacrificed, yet resources are freed up that can be put to much better uses.

Only the federal government has the power to spend beyond its current revenue. It shouldn't do that when the economy is at full employment. But it's an essential step for an economy mired in recession.

Unless we can act collectively, there would be no way to defend ourselves, no way to define or enforce property rights. We couldn't curb congestion or pollution or build and maintain public infrastructure.

Economics, as it is often taught today, portrays us as homo economicus-someone who doesn't vote in presidential elections, doesn't return lost wallets, and doesn't leave tips when dining out of town. Julie Nelson reminds us that most people aren't really like that. She helps point the way to a richer, more descriptive way of thinking about economic life.