Principles Of Government

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(A) Articles are foundational content and (B) Articles are urgently important but may be replaced as they become dated

(A) Fiscal Policy

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    • Lessons From the Great Inflation of 1973-81 A

    By Phil Gramm and Mike Solon - Aug. 2, 2022

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    By Phil Gramm and Mike Solon – Then as now, what drove higher prices was excess demand owing to runaway government spending. Ronald Reagan and Paul Volcker understood. History withholds its wisdom from those who ignore its lessons. Forty years ago this month, the fiscal policy of President Ronald Reagan and the monetary policy of Federal Reserve Chairman Paul Volcker broke the back of the 20th century’s most destructive inflation, ushered in an economic expansion that effectively lasted a quarter of a century, and banished inflation—until now. Read More

    How Government Spending Fuels Inflation A

    By Tunku Varadarajan and John Cochran - Feb. 18, 2022

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    By Tunku Varadarajan and John Cochran – The present crisis may “reteach our politicians, officials and commentariat the classic lessons that there are fiscal limits, that fiscal and monetary [policy] are intertwined.” It may also teach them, Mr. Cochrane says, “that a country with solid long-term institutions can borrow, but a country without them is in trouble.” Read More

    Entitlements Always Grow and Grow A

    By John F. Cogan - Jan. 3, 2022 

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    By John F. Cogan – The seven-decade-long growth of entitlements and the pandemic response are the product of expansionary forces that operate on Congress regardless of who is in charge. Throughout history, the most potent force has been the equally worthy claim. The claim originates from a well-meaning impulse to treat all similarly situated persons equally under the law. Here’s how it works. When first enacted, entitlement benefits are usually confined to a narrow group of worthy individuals. As time passes, groups of excluded individuals claim that they are no less deserving of aid. Pressure is brought by, or on behalf of, these excluded groups to expand eligibility rules. Eventually, Congress acquiesces. But the broadening of eligibility rules only brings another group of claimants closer to the eligibility boundary lines, and the pressure to relax qualifying rules begins again. The process of liberalization repeats itself until the entitlement program’s original limited goals are no longer recognizable. Read More

    How to Stop Politicians From Cooking the Books A

    By John Steele Gordon - Sept. 12, 2021

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    By John Steele Gordon – One justification for the Federal Reserve is to keep the power to print money out of the hands of politicians. A Federal Accounting Board would keep the power to cook the books out of their hands as well. Like the Fed, it would be run by a board of seven members, all professional accountants of long experience, serving 14-year terms. They could be removed only for cause. One member would be appointed chairman, serving a four-year term. The board would take over the duties of the Congressional Budget Office, and the White House Office of Management and Budget would be reduced to formulating the annual budget. The board would estimate future revenue and the costs of all legislation. It would also set the rules for how the federal books must be kept (no calling borrowed money “income”), and would determine if they are accurate and complete, as a CPA does for corporate books.

    One justification for the Federal Reserve is to keep the power to print money out of the hands of politicians. A Federal Accounting Board would keep the power to cook the books out of their hands as well. Like the Fed, it would be run by a board of seven members, all professional accountants of long experience, serving 14-year terms. They could be removed only for cause. One member would be appointed chairman, serving a four-year term.

    The board would take over the duties of the Congressional Budget Office, and the White House Office of Management and Budget would be reduced to formulating the annual budget. The board would estimate future revenue and the costs of all legislation. It would also set the rules for how the federal books must be kept (no calling borrowed money “income”), and would determine if they are accurate and complete, as a CPA does for corporate books. Read More