Reference no: EM133065286

During their discussion of the Swedish economy, the authors distinguish between high-tax governments that provide lots of amenities and low-tax governments that provide few amenities to tax-payers. As in Sweden, the US government has shifted levels of taxation and amenities over time. At this time, the US government is generally shifting toward a high-tax and high-service model.

Recently, the Biden administration considered providing free community college education. Suppose this plan was adopted such that all citizens and permanent residents are provided with two years of free college or technical education, but you have to pay for any additional education like the third and fourth years of a four-year degree program. What impact would this policy have on economic output in the US? Would this policy encourage people to buy more education than they would without the program? Do you expect any detrimental effects from this policy?