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"What Milton Friedman Said 5 Decades Ago
About Government Spending Still Holds True Today"
By John Robson
Excerpt: "A friend’s mother was fond of saying there’s no good way to do a bad thing, and no bad time to do a good one. It’s true of public policy as of life generally, which is why both the public and politicians should talk more about principles and less about motives or tactics. And just as I was wrestling with applying this maxim to the current fiscal mess, someone Xed the classic Milton Friedman line to “Keep your eye on how much the Government is spending, because that is the true tax.” I’m not sure when Friedman said it. But he died in 2006 aged 94, and the clip shows him in middle age, so it was around half a century back. We should have listened, because it has applied consistently since and still does.
In fact, I’d just read a column by my former colleague Randall Denley about an administration of ostensibly conservative inclinations touting its “prudent, responsible” fiscal management while “tracking a clear path” back to a balanced budget from its current massive scary deficit. As Denley added tartly, “As it turns out, tracking a balanced budget is like tracking a unicorn. The tracking is easy, but finding one is hard.”
Indeed. Or at least indeed re: the finding. The tracking isn’t as easy as it ought to be, because government budgets are infamously tangled forests of accounting conventions, focus-grouped prose, economic projections, and jiggery-pokery regarding long-term liabilities. And because neither the authors nor most of the audience adhere to Friedman’s wise words about what exactly we should be keeping an eye on as we navigate these deep dark woods.
As was his wont, Friedman compressed much potentially complex truth into short, clear, vivid words, immediately adding, “There is no such thing as an unbalanced budget.” Which is not addled but Chestertonian in its paradoxical brilliance because, Friedman went on, “You pay for it either in the form of taxes, or indirectly in the form of inflation or debt.”
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