John Robson: Milton Friedman’s Thoughts on Government Spending Are Still Relevant Today
Commentary
A friend’s mother used to say, “there’s no good way to do a bad thing, and no bad time to do a good one.” This principle applies to public policy and life in general. It emphasizes the importance of focusing on principles rather than motives or tactics in both public discourse and policymaking. Recently, someone referenced a classic Milton Friedman line, transforming it to “Keep your eye on how much the Government is spending, because that is the true tax.”
I’m unsure of the exact time when Friedman made this statement, but it was likely around half a century ago, given the age of the clip. His words remain relevant today, emphasizing the importance of monitoring government spending.
Reflecting on a column by Randall Denley, it becomes clear how challenging it is for governments to track a clear path back to a balanced budget from a massive deficit. The complexities of government budgets, filled with accounting conventions, economic projections, and vague language, often obscure the true financial picture.
Friedman’s succinct explanation that “There is no such thing as an unbalanced budget” is a paradoxical truth. Every dollar spent by the government will eventually be paid for, either through taxes, inflation, or debt.
It is crucial to understand that government spending must be accounted for, either through taxes, borrowing, or other means. Advocates for public spending often overstate the benefits, making it challenging to assess the true costs and outcomes.
Therefore, it is essential to have transparent accounting practices and a clear understanding of the financial implications of government actions.
As Friedman pointed out, the true cost of government lies in its spending, not just in what is labeled as taxes. Shifting financial burdens to borrowing or other methods only complicates the issue and hinders meaningful discussions.
Let’s focus on the actual cost of government spending when discussing policies and the size of government, ensuring transparency and clarity in our financial assessments.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
