The reason I bought this book to read was given it was labeled a prequel by many readers to Cowen’s latest book; The Complacent Class. It would provide a good introduction to the next book I’m about to read in how we have become quite complacent as a society given the low-hanging fruit and resulting financial crisis. It is an easy book that would take you 1 – 2 hours to read at most. Like most reviews I read prior this doesn’t look to solve the problems, but more presents the problem and why it is with us today. The other thing to keep in mind is that this book does focus primarily to the US economy with light referencing to other global economies. Although Tyler is a great writer and superb economist, if you’re looking for a more global view then this book may not be the right choice.
Three key takeaways from the book:
1. The larger the role of government in the economy, the more the published figures for GDP growth are overstating improvements in our living standard.
2. Overconfidence is a much bigger problem when leverage is high— that is the simple reason the banks fell so hard.
3. Government consumption spending, education spending, and health care spending overlap to some extent, but in total, without double counting, they still exceed 25 percent of U.S. GDP.