This course examines the role of the government in a market economy. Three broad issues are considered: when is government intervention in the economy appropriate? What is the most effective form of intervention? What effects do government policies have on individual incentives? The course will cover issues in both taxation and spending. Specific programs will be considered such as Social Security, Medicare, education, and public assistance for the poor. We will also discuss rationales and strategies for reforming the U.S. tax system.