Back in 1987, Jerry Ellig and I published a paper, "The Business of Government and Government as a Business" in a book entitled, A Nation in Debt (University Press of America). In that paper, Jerry and I argued that the deficit problem was an expenditure problem and we sought to counter the then popular fallacy that the accumulating public debt problem was due to the Reagan tax cuts. Our argument is that while the deficit (debt) problem is an expenditure problem, the fix is not just one set of policies, but a grouping of policies. We focused on a balanced budget, a tax limitation, and radical monetary reform.
Our main idea was to severe the ability of government to finance its affairs with the hidden tax of inflation, and thus in combination with a balanced budget requirement and a tax limitation bill, we would create an incentive compatible political structure that would get the deficit (debt) problem under control.
What do you think is the biggest weakness of our admittedly early graduate school musings (paper was written I believe in 1985) on this obviously still relevant issue?