Question

Why is it important in America to anchor key decisions about public finance in a theory of the Public Good?

Answer 1

The theory of public finance discusses the key questions regarding the availability of public goods such as roads bridges education health and others. These are the decisions which cannot be left on the private players entirely because then it will be under provided. National Defence for example cannot be left on private provision because the latter seems to be working for profit maximization and national security cannot be left in the hands of profit maximizing entity. Similarly the construction of roads bridges dams, schools universities are considered to be the responsibility of the government solely because only government can provide public goods. It is due to this fact that key decisions about Public Finance are considered under the theory of a public good.