Sustainable Developments: Paying for What Government Should Do; May 2009; Scientific American Magazine; by Jeffrey D. Sachs; 1 Page(s)

The 10-year budget framework that President Barack Obama released in February, called A New Era of Responsibility, is as much a philosophy of government as a fiscal action plan. Gone is the Ronald Reagan view that government is not the solution to our problem; government is the problem. Obama rightly sees an expanded role for government as vital to meeting the 21st-century challenge of sustainable development.

The scientific discipline known as public economics describes why government is needed alongside markets to allocate resources. These reasons include the protection of the poor through a social safety net; the correction of externalities such as greenhouse gas emissions; the provision of merit goods such as health care and education that society deems to be essential for all its members; and the financing of scientific and technological research that cannot be efficiently captured by private investors. In all these circumstances, the free-market system tends to underprovide the resource in question.