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Wednesday, 13 September 2017 13:24

The inherent follies of giving the government more money to spend

Written by  Tim Worstall

Liberal economist Larry Summers says government must get bigger – Larry Summers is probably wrong on this. A brief genuflection: Summers is, as with Paul Krugman, both a very clever man and an excellent economist.

He's also a political operative (Krugman is a political columnist) and excellence from the academic field doesn't quite ooze over into the murky world of spending everyone else's money (which is what politics is).

His arguments bear examination – the first being that the federal government largely takes care of the old, and there're more old people around today, thus the government needs more money. Except, we're supposed to be funding all that Social Security and Medicare out of those trust funds and lockboxes that we've all been paying into for a lifetime. What do you mean there's not enough cash there for us all to get what we've been promised?

Could it be that politicians have been promising us more than they've been charging? You know, the basic complaint from the Right about this welfare state for the Baby Boomers over these past few decades?

It could be just that. What Summers is saying now is exactly the counterpart to what President George W. Bush was saying about wanting to move Social Security over into private savings, at least in part — something he was shouted down for arguing, that for a couple of decades we weren't paying in enough for what we were being promised.

Read more at The Washington Examiner

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