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Spending the Money of People Not Yet Born

Posted By Don Boudreaux On April 12, 2013 @ 9:49 am In Adam Smith,Budget Issues,Debt and Deficits,Other People's Money,Politics | Comments Disabled

Here’s a letter to the Washington Post:

Charles Krauthammer rightly complains that in Pres. Obama’s new budget proposal “The actual deficit reduction over a decade is a minuscule $0.6 trillion – out of a total spending of $46.5 trillion” (“The Obama budget and the appearance of reform [1],” April 12).  The effects on Uncle Sam’s indebtedness will be negligible.  In 2023, the year in which the amount of Uncle Sam’s debt held by the public will reach its lowest level under the Obama plan, the amount of such debt will be 73 percent of GDP – just what it is today [2] and nearly double (!) the historical average of 37 percent [3].

Adam Smith [4] would not be surprised by these insulting political theatrics.  As he observed in 1776, “To relieve the present exigency is always the object which principally interests those immediately concerned in the administration of publick affairs.  The future liberation of the publick revenue, they leave to the care of posterity.”*

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

* Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations [5] (Indianapolis: Liberty Fund, 1981 [1776]), p. 915.  (Specifically, this quotation is from Book V, chapter 3 [6].)

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URLs in this post:

[1] The Obama budget and the appearance of reform: http://www.washingtonpost.com/opinions/charles-krauthammer-the-obama-budget-and-the-appearance-of-reform/2013/04/11/eb069be8-a2e4-11e2-9c03-6952ff305f35_story.html

[2] just what it is today: http://research.stlouisfed.org/fred2/series/FYGFGDQ188S?rid=263&soid=16

[3] the historical average of 37 percent: http://blog.heritage.org/2013/04/10/live-blog-the-presidents-budget-refresh-for-updates/

[4] Adam Smith: http://www.econlib.org/library/Enc/bios/Smith.html

[5] An Inquiry Into the Nature and Causes of the Wealth of Nations: http://www.econlib.org/library/Smith/smWN.html

[6] Book V, chapter 3: http://www.econlib.org/library/Smith/smWN22.html#B.V,%20Ch.3,%20Of%20Public%20Debts

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