The financial crisis has triggered a sharp expansion in government. Some commentators portray this as a paradigm shift–a shattering of the faith in free markets and small government in the U.S. But our chart shows that past recessions have also caused government to grow as a share of the economy. If the effect is more powerful this time, that is because the recession is likely to prove longer and deeper-not necessarily because of shifting paradigms.
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Calabresi: The G-20 Summit-A Vote of Confidence for Capitalism?
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