This article is an exploratory comparative analysis of the spread the "flat tax" in post communist Eastern Europe. The paper overviews the flat tax as a public policy prescription, discusses the various arguments that underpin its potential reception, introduces and applies a synthetic comparative method to study its spread in nine Eastern Europe countries, and draws several conclusions regarding the conditions associated to the implementation of this economic policy idea while suggesting further research directions.

Highlights Our Findings The 1998 Master Settlement Agreement ("MSA") among the major U.S. cigarette companies, 46 state attorneys general, and private plaintiffs' attorneys represented the culmination of decades of tobacco regulation that came about through coalitions between tobacco company "bootleggers" and health interest group "Baptists." Where transaction costs are low enough, bootleggers and Baptists can grease government machinery to produce regulation. But bootleggers' economic interest and Baptists' ostensibly public interest often conflict. This conflict raises transaction costs and leaves untapped political gains that might be achieved by a more efficient alliance led by a political broker - a "televangelist" - who can deal effectively with the major parties.

There has been a rising academic debate on the sustainability of deficit spending and accumulated debt in governments across the globe. This correlates with a growing concern that excessive government deficits and accumulated debt will lead to unstable financial environments and a devalued quality of life for future generations. Varying economies with varying fiscal behavior have increased incentives to work toward more responsible fiscal behavior through reining in deficit spending and debt accumulation. We seek to understand the process these economies undertook, the procedures they used, and the resulting effectiveness of those procedures on achieving fiscal stability.

In this working paper, Dr. de Rugy presents the unprecedented budget of the new administration. President Obama's new era of fiscal responsibility includes running larger deficits in every of the next ten years than any of the Bush years and increasing federal spending in 2009 by at least 32 percent, spending $32,949.90 per household.

This week, Mercatus Center Senior Research Fellow Veronique de Rugy examines the composition of the debt and the significance of each of its components.

Since January 2009, employment has decreased in the private sector at an average rate of 0.3% each month; this is 6 times faster than employment decreased in government.

The Federal Government's recent "stimulus" package allocated $140 billion to help states' budgets, but it hasn't been nearly enough to prop up the unsustainable spending states are engaged in. The authors detail the fiscal crisis still looming in state budgets.

Unemployment insurance programs in the states have been approaching insolvency for more than a decade, putting pressure on states to raise payroll taxes, cut benefits, or seek federal loans. None of these options are desirable during a recession, when individuals need the benefits most.

In this testimony, senior research fellow Eileen Norcross advises the Florida House of Representatives on better courses of action regarding it's budget deficits, particularly in regard to education spending. As of today, the state of Florida faces a budget gap of at least $3 billion. The choices Florida’s government makes today are vital to Florida’s future.