Pigou Club Attracting Alot of Competition

Greg Mankiw's establishment (granted jokingly established) of a "club" advocating Pigovian taxes on hydrocarbon use is generating some fun and worthwhile debate. He responds to his WSJ article's critics today. Here's another "club" maybe worth opening up.

More background here.

I only have time for some quick comments on Mankiw's response. Mankiw says this is one category of Pigou objector: "You recognize the externalities but you don’t think the government should try to respond to them. You are such a believer in small government that you are willing to live with inferior economic outcomes, such as pollution and congestion." How about, we recognize the negative externalities but we also recognize the positive externalities, mainly the contribution to our high and rising standard of living, and we think it nets out well. Also, we don't see how putting more money at the discretion of government avoids "inferior economics outcomes."

This also stuck out: "The reason I am less concerned that the extra revenue will be spent is that it already has been spent. The federal government has promised benefits to the elderly far in excess of what it can pay." Does Mankiw think that further overcommitting is not possible? If the government created Y excess liabilities at X level of fiscal capability, does he not think that expanding the fiscal capabilities of government to say 2X or 3X will result in 2Y or 3Y in excess liabilities?