Fiscal Theory

The US government is the world's largest debtor with deficits feeding debts that pile on in increasingly larger numbers of numbing proportions, writes Christopher Mayer.

Recorded at the Reassessing the Presidency seminar; March 2004. (40:45)

Recorded at Mises University 2003.

What are the costs of a mission to Mars? The $11 billion direct expenses are only the beginning, write Erich Mattei. The burdens also include taxation and inflation, the crowding out caused by state-sponsored research and development, the  misallocation of physical and labor resources, the draining away of talent from the private sector, pollution, and many other hidden costs.

The destruction of the gold dollar and the socialization of credit risk go together with the history of war. Warfare, whether victorious or not, retards the accumulation of productive and livable capital.

If the ruling elite has its way, writes Scott Trask, we are to be faced with at least half a century of intermittent war and a further augmentation of the national security state that has been draining our wealth like a voracious vampire since 1950. There is no secret as to how they will finance it—by borrowing and inflating. If the Democrats are the party of "tax and spend," the Republicans are the party of "borrow and spend."

Laurence Vance offers a critique of John Merrifield's school voucher proposal. If the public school system were abolished, or even rendered irrelevant, what would be the point in collecting tax money from all citizens and redistributing it to those who have school-age children? How is this any different from a Great Society redistribution scheme? In short, Merrifield's "competition" and "choice" could, in practice, amount to vast wealth redistribution and another layer of educational central planning: not choice but market-based socialism.

Why do governments get into bad situations so often? The real problem is not usually out and out corruption, writes Tibor Machan. The problem is systemic. Essentially, governments lack the needed basis for assessing the relationship between their resources and their expenses. They are unavoidably ill informed because the means by which that relationship is best understood is plainly unavailable for governments.

It wasn't supposed to be this way. Did anyone who voted for Bush think that he would far surpass Clinton in expanding the Leviathan state? Actually, writes Christopher Westley, the Republican Party has never been the party of fiscal restraint. It was defined by a neo-mercantile philosophy from its inception as the new Whig party in the 1850s up through the Progressive Era. 

Politicians believe that the size of the economy is fixed and they only have to decide how to divide it up, writes Richard Teather. Austrian economists, with their focus on the real world and human nature, know better; wealth does not just exist, it has to be created, and the disincentive effects of government actions do not just distribute wealth—they actively destroy it.