Click here to see the graph
It shows in 1990 the tax code allowed $500 billion in deductions, like for interest on your mortgage. It looks like about $1 trillion now. Here is what Mankiw says:
"The blue line is total discretionary outlays of the federal government, and the brown line is the sum of tax expenditures. Both are in constant dollars. Note that these two categories of spending are about equal in magnitude. It is just as important to focus on stealth spending implemented through the tax code as on explicit spending."
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