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The U.S. Government’s Fiscal Incontinence

Here’s a letter that I sent on February 9th to the Washington Post:


You report that “The White House is preparing to propose a budget that would fail to eliminate the federal deficit over the next 10 years” (“Trump budget plan would fail to eliminate deficit over 10 years, briefing document shows,” Feb. 9).

This fiscal incontinence is appalling. We’re in the midst of the longest economic expansion in American history, real U.S. GDP per capita is at an all-time high, and the unemployment rate is at a 50-year low. There is simply no good reason for the government now to borrow money, and yet Trump proposes that nearly one-fifth of spending over the next fiscal year be funded with debt.

In 1977 my late Nobel-laureate colleague James Buchanan wrote, with my current colleague Richard Wagner, Democracy in Deficit. In this book they predicted that Keynesian economics, by giving intellectual cover to budget deficits run during recessions, would so weaken norms of fiscal responsibility that politicians would find it impossible to balance budgets even during economic boom times.

I recall as a young student back then that many economists dismissed the Buchanan-Wagner thesis as mistaken, even unscientific. Fiscal reality, I submit, is proving Buchanan and Wagner to have been prescient.

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


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