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Milton Friedman on Government spending and deficits

However, it does have some good features. The deficit is the only thing that is keeping spending from going up still faster.

Context. The sentences immediately after “What is called a deficit is a form of taxation,” in the same spoken answer. He is naming what he thought a deficit is good for, having just called it a very bad form of taxation.

Why Government Is the Problem
Journal article, 1993, Hoover Institution Press, Essays in Public Policy no. 39, pp. 16 to 17
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Milton Friedman, “Why Government Is the Problem” (Hoover Institution Press, Essays in Public Policy no. 39, 1993), pp. 16 to 17. https://miltonfriedman.org/quotes/deficit-only-thing-keeping-spending-from-rising-faster-1993

Quoted for commentary and research. Rights in the underlying work remain with its rights holder, so cite the work itself, not only this page.

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He also said

  1. I would far rather have total federal spending at $200 billion with a deficit of $100 billion than a balanced budget at $500 billion. The thing we must keep our eye on is what government spends.

    Context. From a 1978 Policy Review article on the tax-limitation movement, written the day after California voters approved Proposition 13 (the Jarvis-Gann amendment). Its opening reworks his April 1978 Newsweek column “A Progress Report”; the passages quoted from it here are from the later, new part of the argument.

    The Limitations of Tax Limitation
    Journal article, 1978, Policy Review (The Heritage Foundation); reprinted in the Congressional Record, Extensions of Remarks, June 7, 1979, pp. 14069 to 14071, introduced by Representative Hamilton Fish, Jr. of New York as “an article by Dr. Friedman published in Policy Review, the quarterly journal of The Heritage Foundation”, Congressional Record, June 7, 1979, p. 14070
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  2. Keep your eye on one thing and one thing only: how much government is spending, because that is the true tax. Every budget is balanced. There is no such thing as an unbalanced federal budget. You're paying for it. If you're not paying for it in the form of explicit taxes, you're paying for it indirectly in the form of inflation or in the form of borrowing. The thing that you keep your eye on is what government spends. And the real problem is to hold down government spending as a fraction of our income. And if you do that, you can stop worrying about the deficit.
    Speech at San Diego Chamber of Commerce
    Speech, 1978
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  3. That illustrates a general rule: If a private enterprise is a failure, it closes down—unless it can get a government subsidy to keep it going; if a government enterprise fails, it is expanded. I challenge you to find exceptions.

    Context. Contrasting the bottom line faced by the same group of people running an enterprise in the private sector and in government.

    Why Government Is the Problem
    Journal article, 1993, Hoover Institution Press, Essays in Public Policy no. 39, p. 9
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