The total amount of government spending is therefore what Murray Rothbard called (p. 339) "government depredation on the private product." For Austrians, then, the method of financing government depredation—whether it be taxation, borrowing from the public, or money creation—is of secondary importance. Thus, at a given level of government spending, siphoning off resources from the private economy via deficits financed by money creation is no worse than extracting them through taxation. Indeed inflationary finance may even be preferable to taxation because the threat of physical coercion implicit in taxation has a detrimental effect on the direct utility of private individuals that goes beyond the expropriation of their income. As Rothbard (pp. 10-11) put it,
[W]hy should anyone believe that a tax is better than a higher price? It is true that inflation is a form of taxation, in which the government and other early receivers of the new money are able to expropriate the members of the public whose income rises later in the process of inflation. But at least with inflation people are still reaping some of the benefits of exchange. If bread rises to $10 a loaf, this is unfortunate but at least you can still eat the bread. But if taxes go up, your money is expropriated for the benefit of politicians and bureaucrats, and you are left with no service or benefit.
quarta-feira, janeiro 30, 2013
government depredation on the private product
The Flipside of the Trillion Dollar Coin por Joseph T. Salerno: