Why do governments create inflation? Milton and Rose Friedman

"Inflation is a disease, a dangerous and sometimes fatal disease, a disease that if not checked in time can destroy a society (long list of examples Russia and German after WWI, China after WWII, Brazil in 1954, Chile in 1973, Argentina 1976)  

"No government is willing to accept responsibility for producing inflation, even in less virulent degree.  Government officials always find some excuse--greedy businessmen, grasping trade unions, spendthrift consumers, Arab sheikhs, bad weather, or anything else that seems even remotely plausible. . . none of the alleged culprits possesses a printing press on which it can turn out those pieces of paper we carry in our pockets; none can legally authorize a bookkeeper to make entries on ledgers that are the equivalent of those pieces of paper."

"The more basic question is, why do modern governments increase the quantity of money too rapidly?  Why do they produce inflation when they understand its potential for harm?

From "Free to choose: a personal statement," by Milton and Rose Friedman,  p. 253-254, pb, 1990

https://en.wikipedia.org/wiki/CARES_Act  The CARES act under President Trump

https://www.whitehouse.gov/american-rescue-plan/  is our best example of a government creating inflation.

https://www.ncsl.org/ncsl-in-dc/publications-and-resources/american-rescue-plan-act-of-2021.aspx

https://www.investopedia.com/american-rescue-plan-definition-5095694

Free to Choose

I'm reading Milton Friedman's "Free to choose, a personal statement."  It was published in 1980, but reads like today's paper.  I'm in chapter 3, about the Depression, and the origin and problems of the federal reserve system.

"In the realm of ideas, the depression persuaded the public that capitalism was an unstable system destined to suffer ever more serious crises.  The public was converted to views that had already gained increasing acceptance among the intellectuals; government had to play a more active role; it had to intervene to offset the instability generated by unregulated private enterprise; it had to serve as a balance wheel to promote stability and assure security." And that rapid growth and power extended to Friedman’s day (1980) and ours in 2013. And it extended the Great Depression for a decade because the government had failed in its assigned responsibility in the Constitution--section 8, article 1. The Great Depression was not a failure of private enterprise he says, but of government. Unfortunately, both Presidents Hoover and Roosevelt tried to solve it with more of what brought it about, just as Bush and Obama did in 2008-2009. FDR's New Deal was Obama's Hope and Change.

Which does a better job for the poor, free markets or socialism? Milton Friedman

There is no better system for eliminating poverty than the free enterprise system. Real poverty in this country is a result of bad government failures. Black teens? Lousy government schooling, minimum wage as an anti-Negro law (1978 before race terms were changed), government welfare machine which has produced poor people--encourages families to break up. Our standard of poverty is above the average income of all the people in the USSR--that doesn’t mean we shouldn’t work on it, but we need to recognize the source and problem.

Milton Friedman--which government departments to eliminate

Twelve years ago, Milton Friednman discussed with Peter Robinson of Hoover Institution (Stanford) the basics of libertarianism, and the cabinet offices he would eliminate in the federal government. . . Agriculture, Commerce, Education, etc. down to about four fundamental functions. If you have time, watch the entire interview. If you want to see just the "abolish" parts, start around 20. Rand Paul has suggested many of the same cuts to reduce the budget deficit.



Obviously, Glenn Beck is no right wing, fascist kook--he's a libertarian and channeling Milton Friedman, but without the blackboard. (A fascist believes in more government, not less--Nazi is shorthand for national socialism.) Friedman says, behind every government program is a smoke stack--a cost to a third party for which they receive no compensation. More housing has been torn down under HUD than public housing built. Government now owns something like 1/3 of all the land in the U.S.