On the Record | Let the States Roar

Please see my latest post for the Quarterly Review, ‘Let the States Roar’:

Notice is given from its ‘Constitutional Affairs’ department that ‘The New York Sun . . . opposes a balanced budget amendment.’

The justification cannot be that The Sun favours deficit spending, for the broadsheet prides itself as a tribune for limited government, fiscal probity, and sound money — grounded on the Gold Standard.

An awareness of the speed of unforeseen circumstances is one likely scenario for the editorial stance: allowing for contingency language written into a balanced budget amendment to take into account war or domestic necessity requiring its temporary suspension, The Sun may reason that even such foresight would frustrate government efficacy.

This observer can only speculate. But one germane objection to a constitutionally mandated balanced budget arises in relation to criticism of the supply-side economic revolution of the 1980s. While true that lowering high marginal tax rates can increase government revenues — the famous Laffer Curve axiom — such tax reform itself is not conclusive of prudent government policy. No responsible tax proposal comes without its corollaries: limited government and budgetary restraint.

Read more . . .

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My thanks to editor Dr Leslie Jones of the Quarterly Review; and my appreciation to Foundation for Economic Education president, Lawrence Reed, for his assistance to me in framing America’s indebtedness.

On the Record | Donald Trump addresses America’s Debt

Please see my latest post for the Quarterly Review, ‘Donald Trump addresses America’s Debt’:

‘The Open Conspiracy.’ That is what Henry Hazlitt, the renowned New York journalist, called the political effort to ‘monetise the debt’ by inflating the currency so that U.S. government debts incurred to-day will cost less to pay to-morrow; or, as is the case, years into the future — if ever.

But in an interview with CNBC on 5^th May, Donald Trump, presumptive Republican presidential candidate, took a swing at the conspiracy by matter-of-factly stating that, as President, he would seek to restructure the payment of U.S. Treasury bonds at lower returns.

Trump then cracked the conspiracy wide open four days later, acknowledging America’s — and all countries with fiat money — dirty little secret: ‘you never have to default because you print the money’.

And, in the process, Trump unleashed yet more political opprobrium upon his head.

Read more…

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My thanks to Dr Leslie Jones of the Quarterly Review; and my appreciation to Professor Steven Kates of RMIT University for guidance on calculating inflation.