1) You and your neighbor meet at the University Inn. Your neighbor suggests that the trouble is too much government spending in the economy. Outline how this may be correct, in terms of fiscal policy.

2) Your bartender, Joe, is very nosy. He gets so red faced upon hearing this that you are afraid he will burst. He notes that “big government is not really the problem” at all. Explain, graphically and verbally, how this may be correct. 

3) A Wall Street Journal writer enters the argument and suggests that, in terms of financial stability and “the recent credit mess, there are lessons about government” that we ought to heed. Explain.