Sunday, October 7, 2012

A Separate “Eurozone” Budget: Two-Track Federalism

A separate E.U. budget of €20 billion, 0.2 percent of the GDP in the “eurozone” of the E.U., was proposed in the midst of the debt crisis to be spent in E.U. states that have adopted the euro. At the time of the proposal, the budget for the entire E.U. totaled around €130 billion, which was just over 1 percent of the E.U.’s GDP. While adding 0.2 percent to a federal budget that is just over 1 percent of GDP might seem insignificant to Americans, one might recall the first century of the U.S. (through 1860, and then from roughly 1870 to World War I), when the U.S. budget as a percent of GDP was roughly the same as a percent of GDP.

The complete essay is in Essays on Two Federal Empires, available at Amazon. 


The US Govt Budget as a percent of GDP      
Source: Gordon Tulluck