Quotation of the Day…
by Don Boudreaux
on May 10, 2020
… is from an e-mail sent to me yesterday by my GMU Econ colleague Dick Wagner (quoted here with his kind permission). Earlier in the day I’d e-mailed Dick telling him of the challenge that I’m having writing a paper to clearly explain just what Jim Buchanan meant when he criticized Anglo-American economists for analyzing the taxing (“factor-market”) side of a government’s budget separately from the spending (“product-market”) side; Buchanan sought to build a “bridge” between these two sides of a government’s budget choices so that decisions made on one side are tied more closely to decisions made on the other side:
In this respect, it is also notable that nearly invariably politicians stress the product market side of their doings and avoid the factor market side. If you take that Herbert Hoover pledge of a chicken in every pot, that pledge could have been stated as a program to force people to spend a day a week working in chicken farms. But that program would rightfully sound draconian to people, whereas the other sounds warm-and-fuzzy.
DBx: It’s a sad reality that the collective nature of governments’ budgetary choices make the use of such fiscal bridges damaging to the political careers of those in any polity larger than a relatively small number of individuals.
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