The Problem of Scarcity

Now that Obama is the new President-elect, he is going to face numerous claims, particularly from the base of the Democratic party, to the federal treasury. Tax rebates for 95% of Americans, increased government spending on healthcare and education, ballooning Medicare and Social Security expenses, etc. There is little appetite for fiscal austerity or cutting budgets. Yet, at the same time, the economy is shrinking and the targeted rich, who Obama wants to tax, is shrinking as well, and not likely to roar back if they face diminished incentives to create wealth. How will Obama react? More importantly, how will his supporters react? You should read this article by David Brooks.