02/13/2018

To Spend Or Not To Spend

Brandon J. Weichert, American Spectator

In your heart, you know Rand Paul was right.

With the recent budget vote, Washington has decided to spend an additional $300 billion over the next two years, on top of the $1 trillion that we’ve just tacked on to the national debt with the recent tax cuts. Congress also decided to put off dealing with the budget again until March 2019. Thanks to this decision, whatever economic gains we may experience since the passage of the tax cuts are at risk over the long-term. A debate is needed, if the country is to have a chance at sustainable, widespread economic growth. We must decide very soon on whether we seek to be the America of relatively low taxes, reasonable regulation, and fiscal responsibility, or if we want to be another Europe. I shudder at what the American peoples’ choice will be.

The GOP says that its ultimate goal is to get sustainable, high levels of economic growth over the long-term. Unfortunately, that means that there’s still more spending to be done. Republicans believe that tax cuts and regulatory reform will negate the need for spending reductions because the first two policies will ignite the economy, allowing for economic growth to outpace debt creation (and the larger growth would also mean the more money that companies and citizens paid to the government in taxes without an actual tax increase).

Republicans say this was precisely what happened during the Reagan boom. The GOP is correct. And, to be sure, if we want to create sustainable growth levels in the long-term, an infrastructure bill (that would anticipate future growth) coupled with greater investment into education (that would help to create the workforce of tomorrow) are both necessary.

However, unlike the Reagan boom, the country’s debt levels have never been this high. Further, for every penny we want to spend on things that would actually create sustainable economic growth (like tax cuts, infrastructure, and education), the bulk of that which America is deficit spending on are things that will in no way contribute to economic growth.

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In Search Of History

4,000 Years Of Price Control

Tablets, said to be 200 years older than the Babylonian Code of Hammurabi ... show that the ancient kingdom of Eshnunna had wage control and price control. The news ought not to have come as a surprise. For the code of Hammurabi itself (unearthed in 1902), which was promulgated earlier than 2000 B.C., fixed prices, wages, interest rates, and fees. This makes price control at least about 4,000 years old. ...

 

Ironically, it is those who now wish to return to this ancient totalitarian device who are fondest of calling themselves “progressives.” They are also fond of saying that those who believe in economic liberty “are living in the nineteenth century.” These controlists have yet to learn that they themselves are still living, as the discoveries in Babylonia attest, in the nineteenth century—B.C.!

-- Henry Hazlitt,

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    FreeMarket Central Shadow Stats: 9.9%

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