A Quote by Caroline Baum
It is always and everywhere the province of the central bank to monetize any spending, the government's or the private sector's, by printing enough money to pay for it in depreciated dollars.
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Living standards in both the public and private sector have to be brought down. The private sector has to sell more abroad and consume less at home. The government sector has to get closer to just spending what it can collect in taxes.
In World War II, the government went to the private sector. The government asked the private sector for help in doing things that the government could not do. The private sector complied. That is what I am suggesting.
Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending. Furthermore, private spending is generally more efficient than the government spending that would replace it because people act more carefully when they spend their own money than when they spend other people's money.
The biggest difference between the private sector and public sector is in the private sector, there's a sense of urgency because you have customers and you have competitors. Whereas in government, one of your major objectives is to not make any really big mistakes.
If you have a private firm and you spend a ton of money to pay employees, but what you produce is a flop, there will be no value to GDP. But government spending all gets counted as contributing to economic growth. That's why in the early days of creating these measurements, some people didn't want to count government spending.
If you work for the federal government, the average salary is $7,000 higher than the private sector. Something's wrong with that, when you're making more money working for the government than you can working in the private sector.
If taxes and government spending are both slashed, then the salutary result will be to lower the parasitic burden of government taxes and spending upon the productive activities of the private sector.
We owe something to the government to grow up in this great country. I'm tired of hearing people in the private sector talk like they don't owe the government anything. We do. This is a great country because we all pay into it. It's about time we all pay into it. ... If we paid the same amount of taxes we paid when Bill Clinton was president, I would be a happy guy, and the budget would be closer to balanced. You cannot give away money, whether you give it to rich or poor people. That's what George Bush did -- excuse me, trillions of dollars. You can't do that.
The best way to encourage economic vitality and growth is to let people keep their own money.When you spend your own money, somebody's got to manufacture that which you're spending it on. You see, more money in the private sector circulating makes it more likely that our economy will grow. And, incredibly enough, some want to take away part of those tax cuts. They've been reading the wrong textbook. You don't raise somebody's taxes in the middle of a recession. You trust people with their own money. And, by the way, that money isn't the government's money; it's the people's money.
When you own gold you're fighting every central bank in the world. That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.
The greatest threat facing America today
is the disastrous fiscal policies of our own government,
marked by shameless deficit spending and
Federal Reserve currency devaluation.
It is this one-two punch -
Congress spending more than it can tax or borrow,
and the Fed printing money to make up the difference -
that threatens to impoverish us by further
destroying the value of our dollars.
Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people's savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.
In the past we entrusted money to the government sector and the government sector simply did not spend the money wisely. And that is why we need reforms, but the government sector is not being reformed.
I believe that "government", as we know it today, should pull out of most things except for law enforcement and justice, national defense and foreign policy, and let the private sector, a "Grameenized private sector", a social-consciousness-driven private sector, take over their other functions.
A government cannot be expected to allow independence to its central bank unless that bank is also accountable to it and to the wider public. That is, the central bank must be able to be judged on whether or not it has achieved its agreed objective.
The principle that a central bank, charged with controlling inflation, should be independent from the government is unassailable. It may also be true that it's easier for the central bank to guard its independence from political pressure when it mainly holds government securities.
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