Monday, August 28, 2006

Government funding and the anti-Walmart crusade

There are at least five ways that a government can raise funds to pay for its expenditures.
  1. It can print money. Technically speaking, a government can never go bankrupt because it always print as much new money as it needs to covers its debts. My understanding is that governments are reluctant to embrace this method for fear of damaging its economy with excessive inflation. Liberals sometimes advocate this step, justified by the observation that moderate inflation produces economic growth. Conservatives tend to be more vigilant against this step, justified by the observation that moderate inflation produces economic growth followed by an economic crash.

  2. It can sell things for a profit. A massive chunk of United States Federal expenditures in the 19th century was funding with land sales, for example.

  3. It can borrow money and promise to pay it back later. Where would be without good old fashioned deficit spending?

  4. It can tax its citizens or subjects.

  5. And when all else fails, the goverment can ask its citizens for a forced gift. That is, if the government wants to do X, it simply instructs some portion of its population to pay for X OR ELSE!
As part of its longstanding tradition of honoring liberal principles, the contemporary Democratic Party has embraced principle 5 as a means of financing their pet programs. The Big Tobacco settlement of the 1990s, the Microsoft antitrust lawsuit, the perpetual calls for investigations of price gouging by oil companies, and the propaganda campaign against "Big Food" are all examples of liberals essentially looting the economy for more funds. A convenient FAQ of the latest propaganda campaign is available here. The link to the column by Ezra Klien is especially interesting because it admits that the anti-Walmart crusade is just another liberal scam:
And because Wal-Mart so obsessively pursues the lowest possible prices, they're not only depriving their own workers of generous benefits and compensation, they're making it literally impossible for their producers to do so, as Wal-Mart won't abide by the minor cost differences that on-shore production and respectable benefits demand.
Obviously capitalism anywhere is a threat to socialism everywhere.

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