We Are Better Than This: How Government Should Spend Our Money.

• Author: Hoffer, Adam
• Position: Book review

* We Are Better Than This: How Government Should Spend Our Money

By Edward D. Kleinbard

New York: Oxford University Press, 2014.

Pp. xxvii, 509. $29.95 hardcover.

In We Are Better Than This: How Government Should Spend Our Money, Edward D. Kleinbard proposes to readers that by putting government to work in the areas in which government most productively complements private markets, our country will be made healthier, wealthier, and happier. Specifically, he recommends "a more muscular federal government that supplements the private sector through sensible investment and insurance programs" (p. xx).

Kleinbard provides an excellent identification of market shortcomings and U.S. fiscal policies that have room for improvement. Unfortunately, his well-intentioned policy proscriptions are entirely undermined by his poor causal inferences and failure to consider, present, or discuss the public-choice literature. He relies far too much on unrealistic, normative assumptions of a benevolent, well-informed government. Further, the book is riddled with cherry-picked statistics that draw close resemblance to those in Thomas Piketty's recently published book Capital in the Twenty First Century (Cambridge, Mass.: Belknap Press of Harvard University Press, 2014), which, not surprisingly, Kleinbard praises as complementary to his own work.

Kleinbard divides the book into three sections. Section I, "Our Fiscal Soul in Peril," introduces the moral foundation and recent empirical evidence for which the author justifies his recommended changes. Section II, "Starving Our Fiscal Soul," dissects several of the major tax bases and federal expenditure programs and compares those fiscal policies with similar policies in other Western democracies. Then Section III, "Reclaiming Our Fiscal Soul," details a proscription for improving the tax code and increasing government spending via public investment and insurance.

Section I introduces the metaphor of a "fiscal soul." Kleinbard describes the fiscal soul as a collection of nationally shared values that can advance society's happiness through governmental fiscal policy. Promoting a healthy fiscal soul, he claims, is the way we can avoid becoming "a nation of jerks."

Kleinbard cites Adam Smith's The Theory of Moral Sentiments throughout the book and uses Smith's notion that "[w]hen the happiness or misery of others depends in any respect upon our conduct, we dare not, as self-love might suggest to us, prefer the interest...